Christmas is coming and loved ones are thinking about what to give each other for Christmas. Some families are thinking about donating their possessions. I've put together an information pack below on how to make a gift. There is no obligation to accept a gift, and in some cases there may be conditions attached to donations relating to ownership.
Donor and donee details and signatures
The gift book must include both parties' details and also any family relationship.
Both parties must sign the gift certificate; that is, the recipient must declare that he or she accepts the gift.
Identification of the gift
The object of the donation should be identified and factors that affect the value of the gift in particular can be mentioned in the gift certificate. For example, it is worth mentioning any factors that reduce the value, as these may affect the amount of gift tax. In this way, the recipient will also know what he or she is receiving. This explanation of the value of the gift is also done with the tax authorities in mind. The value of the gift does not have to be entered in the gift register, but it must be entered in the gift tax return after the donation.
If the donation is of a residential property, the deed of gift must also state whether the gift is subject to debt or whether the property is pledged as security for the debt. It is also worth mentioning where the share and pledge deeds are located. A transfer entry will be made in the share register to indicate the change of ownership.
Exclusion from the right to marry and witnesses
Often, a gift deed excludes the spouse of the recipient from having marital rights to the object of the gift. When this is done, the deed of gift must have two witnesses. Otherwise, no witnesses are needed!
Prior inheritance or donation
In the case of a bastard heir to whom a gift is made - a note is often made in the deed of gift as to whether the gift is to be treated as an advance inheritance received by the recipient or as a gift. In the case of a gift, the donation is not taken into account as the beneficiary's share of the inheritance, but all heirs receive an equal share of the inheritance. If there is no mention of a gift, the donation is presumed to be an advance inheritance from the donee. This will then affect the amount of the inheritance that the donee will subsequently receive.
Withholding and inheritance tax planning
Inheritance tax planning often involves making a gift of property over which the donor retains control. This option is also widely used to reduce the donor's tax burden, as the right of possession reduces the donor's gift tax.
In this case, the donee should understand the characteristics of the tenure:
- permission to relinquish the right of tenure is obtained from the National Board of Digital and Population Information, if the tenure holder is subsequently a guardian,
- the property cannot be sold without the consent of the beneficiary,
- agree in advance who will be responsible for the running costs, repairs and other charges for the gift.
Article drafted by the Advocate Tuula Rainto, Amos Law Firm. You can always call him free of charge on 010 299 5090. You can consult our price list Here.
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Inheritance division
Gift books