Completing your gift or inheritance tax return (IT38)

Powers of revocation

A power of revocation is where a person gives a gift such as property, but has the right to take it back. No Capital Acquisitions Tax (CAT) is due in this situation.

Tax becomes payable when the person who gave the gift either:

  • gives up this right of revocation and it becomes a full gift for CAT purposes
  • or
  • dies and the gift becomes an inheritance.

If you had free use of the property during this time, then you may have to pay tax on that benefit. Tax is calculated on the annual rent that would be payable if the property was let on the open market. 

This benefit is deemed to be taken on 31 December for each year that you have the use of the property.

Next: What is a disclaimer of benefit?