It is perfectly possible to transfer a share of the estate to another person. It is worth bearing in mind all the tax consequences.
After the death of the deceased, a partner in the estate can transfer, for example sell or donate, his or her share of the estate to another person. This can be anyone, including, for example, another partner in the estate. The transfer must be made in writing and the document must be signed. There are no other formal requirements for the transfer of a share in the estate. For example, although the share in the estate might include immovable property, i.e. real estate, the transfer does not have to be made in the form of a real estate transaction. The transfer of an estate is considered to be a transfer of movable property.
It is worth noting that the person giving up their share of the estate will have to pay inheritance tax on their share as normal.
To facilitate the distribution of the estate, the partners may wish to sell or buy shares in the estate. This happens in estates where the nature of the property is difficult to divide, for example a particular property that the partners do not wish to jointly own.
The transfer of a share in the estate does not remove the rights of the transferor as a partner in the estate. If the transferee is also a partner in the same estate, such a transfer does not result in any changes to the estate other than the transfer of the share in the estate. However, a partner who has sold or donated a share in the estate may, if he wishes, authorise the purchaser or donee to represent him, for example in the distribution of the estate, if the transferor no longer wishes to participate in the decision-making process concerning the estate.
Tax consequences of the transfer of an estate
The transfer of an estate may have tax consequences for both parties. The transferor of the estate will have to pay inheritance tax and possibly transfer duty, while the purchaser may have to pay transfer duty on top of the purchase price. Similarly, the donee will pay gift tax on the share of the estate received as a gift.
If you are considering transferring or buying your share of the estate, it is advisable to discuss the tax consequences with a lawyer beforehand.
Article written by Attorney Tuula Rainto, Amos Law Firm. You can always call him free of charge, p.010 299 5090.
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