While giving property as a gift can be challenging, it is quite popular around this time. There is more than one reason why giving the property as a gift is such a popular thing right now. Yet, one reason is absolutely the clearest one. The reason is Inheritance Tax (IHT).
While there are numerous strategies to minimize IHT liabilities, for the vast majority, the property is the most important concern. As our most precious asset, the house we live in is frequently the source of heavy IHT costs for the family members we leave behind, therefore it's no surprise that donating property is a popular topic right now.
How to Give Property with Deed or Gift it?
Regardless of the sums involved, it is feasible to transfer ownership of your property without exchanging money. This procedure is known as a deed of gift.
Executing a deed of gift can be a difficult task, but it is not impossible. Before thinking about a gift transfer, a few criteria must be met, and they are rather straightforward.
· The owner must be of sound mind and act of their own volition.
· Before proceeding with a deed of gift, seek independent legal counsel.
· There should be no outstanding obligations secured against the property in issue.
· The proprietorship registration at the Land Registry shows that the owner is listed as such.
If you meet all of the above, your transfer can be considered, yet, we recommend you to get a bit of professional advice as you can face some complexities in the process. There are lots of forms to fill out to give property as a deed or gift, and your solicitor can help you in the process.
What are the Risks of Gifting a Property?
While these are not common problems, it would be nonsensical to ignore them.
-Although it is obvious, you cannot reverse your decision once you sign and complete all your documents.
-If you have given your property to your son or daughter and they later endure marital difficulties that lead to divorce, their wife or husband may be able to claim a piece of your property for themselves.
Talk to the person you are gifting to before it causes any future problems. There's also the matter of your beneficiary's financial stability to consider. Many a donor has been left sad (and, in some cases, homeless) by family members losing property owing to secret financial troubles, so be careful to discuss things honestly before proceeding.