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: