Deed of Gift

If you have ever wondered how to transfer an asset legally to another person then this article will be of interest to you. People do this reasonably regularly and it is actually a very straightforward process, as long as you have the correct legal document in place. Known as a Deed of Gift it will allow you to transfer ownership of practically any asset; not just money but also shares, property or a range of other assets.

The key feature of a Deed of Gift is that no payment is given by the party who is receiving the asset. This is what distinguishes the legal agreement from a contract governing a sale or a loan agreement. In legal terms the person giving the gift is called the Donor and the person receiving it is called the Donee. Importantly, as the agreement does not involve a payment the signing of the contract must be witnessed and the witnesses must have no interest in the arrangement.

Gifts are currently exempt from Inheritance Tax if the Donor lives for at least seven years after the gift has been made, as long as the Donor does not retain an interest in the gift. However, if the Donor dies within seven years then Inheritance Tax will be payable on the value of the gift. Spouses or registered civil partners are generally exempt from Inheritance Tax, as long as they have a permanent home in the UK. In addition, gifts made to some organisations, such as charities, museums, universities and community amateur sports clubs are also exempt.

The following are the most common Deed of Gift agreements:

Deed of Gift Shares
This agreement allows a person to transfer shares or other securities in a company as a gift to another individual. It is important to note that ownership and interest will be transferred completely and the Donor will retain no rights after they are gifted, including to dividends. Before transferring shares the Donor should also check to ensure there are no restrictions in the company’s Articles of Association that would prevent shares from being transferred in this way.

Deed of Gift Property
This is a common agreement and is used to transfer property or land as a gift from one person to another. It should be noted that, as the gift is unconditional, the Donor will retain no rights or interest in the property or land, which would include rent.

Dead of Gift Object
This is a flexible agreement and covers many different types of asset including works of art, antiques, classic cars or wine collections. As with any other Deed of Gift, once the agreement has been signed the legal ownership will pass immediately to the Donee and the Donor cannot subsequently take ownership back if they change their mind.

Cash Deed of Gift
A Deed of Gift agreement can also be created to cover cash transfers. As with all Deed of Gift contracts the Donor will not retain any rights of ownership or repayment, differentiating these arrangements different from loan agreements.

Liverpool landlord seeks compensation over Anfield redevelopment

A local landlord may cause Liverpool Football Club serious problems standing on their way to the expansion of their stadium. He called for a significant compensation or he would not allow the knocking down of his houses. For those of you, who would prefer to avoid being in a similar situation – use the deed of gift template.
The planned expansion is by 15,000 seats, which means they have to demolish some streets surrounding the stadium in order to complete their aim.
The number of the houses, which will have to be destroyed is 72.  Liverpool Football Club already owns 51 of them and tries to buy the rest.
Graham Jones owns two of the remaining houses. He claims that the club damages the area as it only buys houses and leaves them empty afterwards.
“Anfield was your average working-class area until Liverpool began buying houses and leaving them empty because they wanted the streets knocked down,” said Jones.
He added that he has had serious difficulties in finding tenants because of the decline of the area. According to his calculations, this has cost his partner and him about £500,000 in rent over the years.
Council leader Joe Anderson confessed there were lots of mistakes in the preparation for the stadium’s enlargement saying that residents were not protected enough.
However, he shared he did not quite well understand the motives of landlords.
“It is worth noting that the only owners with whom we have not reached agreement on acquisition are private landlords who do not live in the area and whose interests are purely financial,” said Anderson. “We will not allow a handful of private landlords to stand in the way of plans which will benefit everyone.”

Gifting Shares by way of Deed of Gift

A Deed of Gift is a formal legal document used to give a gift of property, money or shares/securities to another person. It transfers the money or ownership of shares/securities to another person without payment in return.

The person who creates and executes a Deed of Gift to transfer money, property or shares from himself to another person is called a Donor and the person receiving the gift is called the Donee.

Generally, most Deed of Gift transfers are carried out between family members as property transferred in this way is usually given out of the love and affection the giver has for the recipient.

Transferring shares, property or money by way of gift must be executed as a Deed because no consideration is given in return for the gift, thus the document has to be witnessed. Please note: the witnesses have to be disinterested parties. In other words they cannot have a stake in the transfer of the property. If a witness stands to benefit or take a loss because of the transfer of the property, then cannot be considered disinterested and cannot act as a witness.

A Deed of Gift – Shares template shall be used where the Donor wants to give shares or other securities in a company by way of gift to someone else.

This is an unconditional gift; the Donor gives the shares/securities absolutely and retains no right or interest in the gifted shares.

N.B. When gifting shares please make sure to check the Articles of Association of the relevant company in order to see if the company’s consent is required before the transfer of shares can be carried out. If the Articles of Association state that the negotiability of the shares is restricted by the prior written approval of the company then the Donor must obtain the approval of the company before the gift can be made.

Giving a gift to someone can have some Inheritance Tax implications. Generally, any gifts made to any individuals will be exempt from Inheritance Tax payments if the Donor lives for a total of seven years or more after having made the gift. These kinds of gifts are usually known as Potentially Exempt Transfers (PETs).

However, please note that if the Donor gives away an asset but keeps an interest in it then the gift will not fall within the category of a potentially exempt transfer.

If the Donor dies within seven years of making a gift and the gift is valued at more than the Inheritance Tax threshold, Inheritance Tax will need to be paid on the value of the gift usually by the Donee or by the representatives of the estate.

Our templates are in Microsoft Word format, written in plain English easy to use and edit.

 

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Deed of Gift Form

A Deed of Gift is a formal legal document used to give a gift of property or money to another person. It transfers the money or ownership of property (or share in a property) to another person without payment in return.

Generally, most Deed of Gift transfers are carried out between family members as property transferred in this way is usually given out of the love and affection the giver has for the recipient.

The person who creates and executes a Deed of Gift to transfer money or property from himself to another person is called a Donor and the person receiving the gift is called the Donee.

Transferring property or money by way of gift must be executed as a Deed because no consideration is given in return for the gift, thus the document has to be witnessed. Please note that the witnesses have to be disinterested parties. In other words they cannot have a stake in the transfer of the property. If a witness stands to benefit or take a loss because of the transfer of the property, then cannot be considered disinterested and cannot act as a witness.

A Deed of Gift can be used to donate money, land and/or valuable objects to someone else.

An irrevocable Deed of Gift once signed and witnessed, transfers the gift to the Donee who takes immediate legal ownership of the gift. Consequently, the Donor cannot later change his mind and reclaim the objects he has transferred.

Giving a gift to someone can have some Inheritance Tax implications. Generally, any gifts made to any individuals will be exempt from Inheritance Tax payments if the Donor lives for a total of seven years or more after having made the gift. These kinds of gifts are usually known as Potentially Exempt Transfers (PETs).

However, if the Donor gives away an asset but keeps an interest in it or continues to benefit from it then the gift will not fall within the category of a potentially exempt transfer.

If the Donor dies within seven years of making a gift and the gift is valued at more than the Inheritance Tax threshold, Inheritance Tax will need to be paid on the value of the gift usually by the Donee or by the representatives of the estate.

However, please note that certain gifts are exempt from Inheritance Tax. If the gift in question falls within the exempt categories then, even if it is valued at more than the Inheritance Tax threshold, the Donor can pass on the asset/gift without paying Inheritance Tax.

Gifts can be made to certain people and organisations without having to pay any Inheritance Tax. These gifts are exempt whether are made during the Donor life or as part of the will.

Generally, there’s usually no Inheritance Tax to pay on gifts left to a spouse or civil partner even if it’s over the threshold, as long as they have a permanent home in the UK.

N.B. Gifts left to an unmarried partner, or a partner that is not in a registered civil partnership, are not exempt.

Furthermore, gifts made to charities, museums, universities, Community Amateur Sports clubs and the National Trust are exempt.

The Legal Stop provides different Deed of Gift templates to be used in specific circumstances: