IHT gifts with reservation – Buzzoni v HMRC

The Upper tribunal has dismissed the taxpayers’ appeal against the decision of the First-Tier Tribunal in Buzzoni v HMRC [2012] UK UT 360. The decision raises an important question in relation to gifts of leasehold property. the question, in a nutshell is: ‘Is it possible for the owner of a long leasehold fiat, or indeed other property held on long lease, make a gift which will be an effective Potentially Exempt (or chargeable) Transfer when made, or will such a gift always, be a Gift With Reservation of Benefit?’