Gift (law)

src: www.winterbluemusic.com

A gift, in the law of property, is the voluntary transfer of property from one person (the donor or grantor) to another (the donee or grantee) without full valuable consideration. In order for a gift to be legally effective, three requirements must be met:

1. Intention of donor to give the gift to the donee (donative intent)
2. Delivery of gift to donee.
3. Acceptance of gift by donee.

Video Gift (law)

Elements

Intention

The donor of the gift must have a present intent to make a gift of the property to the donee. A promise to make a gift in the future is unenforceable, and legally meaningless, even if the promise is accompanied by a present transfer of the physical property in question.

Suppose, for example, that a man gives a woman a ring and tells her that it is for her next birthday and to hold on to it until then. The man has not made a gift, and could legally demand the ring back at any time before the woman's birthday. In contrast, suppose a man gives a woman a deed and tells her it will be in her best interest if the deed stays in his safe-deposit box. The man has made a gift and would be unable to legally reclaim it.

Delivery

The gift must be delivered to the donee. If the gift is of a type that cannot be delivered in the conventional sense - a house, or a bank account - the delivery can be effected by a constructive delivery, wherein a tangible item allowing access to the gift - a deed or key to the house, a passbook for the bank account - is delivered instead. Symbolic delivery is also sometimes permissible where manual delivery is impractical, such as the delivery of a key that does not open anything, but is intended to symbolize the transfer of ownership.

Certain forms of property must be transferred following particular formalities described by statute law. In England, real property must be transferred by a written deed. The transfer of equitable interests must be performed in writing by the owner or their agent.

A gift is assumed when property owner deeds real estate as joint tenants with rights of survivorship. Regardless of contribution to purchase price, such a deed guaranteees each tenant equal shares upon sale or partition of the property.

Acceptance

The donee must accept the gift in order for the property transfer to take place. However, because people generally accept gifts, acceptance will be presumed, so long as the donee does not expressly reject the gift. A rejection of the gift destroys the gift, so that a donee cannot revive a once-rejected gift by later accepting it. In order for such an acceptance to be effective, the donor would have to extend the offer of the gift again.

Maps Gift (law)

Types

Gifts can be either:

inter vivos

• lifetime gifts (inter vivos gift, donatio inter vivos) - a gift of a present or future interest made and delivered in the donor's lifetime; or

causa mortis

• deathbed gifts (gift causa mortis, donatio mortis causa) - a future gift made in expectation of the donor's imminent death. A gift causa mortis is not effective unless the donor dies of the impending peril that he or she had contemplated when making the gift, i.e. these gifts can only be made when the donor is in a terminal condition.

Gifts can also be:

outright

• outright - made free of any restrictions, such as being subject to a trust;

onerous

• onerous - made with a burden or obligation imposed on the donee; or

remunerative

• remunerative - made to compensate for services rendered

src: img1.etsystatic.com

Revocation

Conditional gifts can be revoked based on (1) donee not full-filling the conditions (2) breach of contract by donor such as an engagement ring and in this case, the donee keeps the gift.

src: img1.etsystatic.com

Taxation

In India

In India, previously there was Gift Tax Act under which donor had to pay the gift tax on the amount of gift. However, the said Act has been abolished and from FY 2004-05, a new provision was inserted in the Income Tax Act (1961) under section 56 (2) which provides that if the gift is received by an individual or Hindu undivided family from any relatives or blood relatives or at the time of marriage or as inheritance or in contemplation of death, it will not be taxable. In all other cases if the aggregagte of gifts received exceeds Rs 50,000 in a year, the gift will be taxable as income from other source.

United Kingdom

Gifts into a trust above a certain value (known as the nil rate band which is currently £325,000 but this limit may be reduced by certain gifts made in the last 7 years) are generally subject to inheritance tax in the United Kingdom though at the reduced rate of inheritance tax of 20% rather than the full rate of 40%. There are certain reliefs that may apply to reduce or eliminate the IHT due including business property relief and agricultural property relief. Gifts to individuals are generally not subject to inheritance tax unless the donor dies within 7 years of the date of the gift. There is anti-avoidance legislation to prevent assets being gifted but with the donor retaining a benefit from the asset (for example the gift of the main residence while continuing to live in it will be ineffective from an IHT perspective unless market value rent is charged). Gifts in life may be a way to circumvent inheritance tax on death.

In the United States

src: www.winterbluemusic.com

See also

• Re Cole.
• Johnson v Buttress [1936] HCA 41
• Gift tax

src: www.winterbluemusic.com

References

Source of the article : Wikipedia