To get around the GWR rules a variety of complex schemes were developed, which allowed continued occupation of the family home whilst effectively removing the equivalent value from the IHT estate. For an individual with a family home worth say £500,000 the prospect of an ultimate IHT saving of £200,000 (being £500,000 x 40%) was an attractive one.
Over time most schemes were tested in the courts and blocked for the future.
However the Revenue wanted to find a more general blocking mechanism. Their approach has been somewhat unorthodox with the GWR rules remaining as they are. Instead a new income tax charge is levied on the previous owner of an asset if they continue to be able to enjoy use of it. The new rules are referred to as the Pre-Owned Assets (POA) rules. They are aimed primarily at land and property but also apply to chattels and certain interests in trusts.