1. I want to gift my property to my children but I need
to keep living in my home. Is it possible to do this
without a massive tax bill?
Once you have made the gift you cannot change your mind
- you cannot go back. Reservation of Benefit rules
introduced a few years ago mean that if you gift your
residence and continue to receive the benefit of the asset by
living in it, then you will be taxed. An alternative is to pay
your children a market rent whilst you enjoy the benefit. This
however, could have the effect of creating a tax issue for
2. I would also consider gifting some investment
property, but would still need to receive the rental
You should bear in mind that gifts of assets such as property
can be clawed back by a local council were you to be placed in
a council run nursing home at some point in the future. In the
case of investment property, you cannot gift the asset and still
enjoy the income yourself. Before you make any moves,
consult an experienced taxation or trust specialist accountant,
or a good property or probate solicitor.
3. Would I need to set up a trust?
Setting up a trust can work but can be incredibly complicated
and expensive. Also, as the Treasurey becomes more and
more persistent in closing inheritance and other tax loopholes,
these expensive measures can become ineffective over time.
4. Can I save expense if the Gift Deed is in favor of my
In case of gifting property to son, a very nominal amount of
stamp duty needs to be paid for registering.
5. What are the steps involved in Transfer of Property in Gift
Execution of the gift deed, Donee’s acceptance of the gift
(Acceptance can be express or implied), Payment of adequate
stamp duty and registration of the property, Handing over of
possession of the property, Mutation of the property in the
municipal records by donee in his name, if required. There cannot
be a gift without a giving and taking. The giving and taking are two
simultaneous and reciprocal acts that constitute a gift. In order to
constitute a valid gift, a basic requirement is acceptance. There is
no specified mode for acceptance. A transaction of gift in order to
be complete must be accepted by the donee during the lifetime of
6. Is a gift of property is invalid without a registration
A gift of property is invalid without a registration done.
Register the Gift Deed: According to section 123 of The
Transfer of Property Act, it is invalid if a gift of a property
is not registered. All the required documents should be
stamped and registered. It should be attestation by two
7. Can a minor be a donor of gift?
Gift Deed to Minor: A minor cannot be a donor and a gift by a
minor will be void. If the property is gifted to a minor, on behalf of
a minor, a natural guardian can accept a gift.
8. If the property is self acquired by the donor then can he/she
gift it to you by all means?
If the property is self acquired by the donor, then he/she can gift it
to you by all means and no one can legally create problem. If it is
an inherited property by the donor, then her children also will have
rights over the property.