Deed of gift - property and other uses

What is a deed of gift?

A deed of gift is a formal legal document that records the full and final transfer of money or assets from one person or entity (the donor) to another (the donee) without monetary consideration. You may need to get a deed of gift in place for various reasons (either to protect your and the donee interests or because a 3rd party insists on it), ranging from estate planning to property transactions.

Common situations where a deed of gift is needed

• For Inheritance Tax Planning - to document a lifetime gift for the purpose of evidence to support the potentially exempt transfer period seven-year rule in inheritance tax planning.

• Property - A deed of gift is often needed when giving money to family members for a property deposit. Mortgage lenders typically require formal documentation to evidence that any funds provided by parents are a gift and not a loan and to satisfy anti-money laundering requirements by evidencing the source of funds.

What to include and formalities

A valid deed of gift must include:

• Full names and addresses of both donor and donee

• Clear description of the gifted property/assets

• Date of transfer

• Legal declaration confirming the gift is absolute and irrevocable

• Confirmation that the transfer is made without consideration

• Precise description of gifted property including current market value (where applicable)

• Any conditions or restrictions (though these should be minimal to maintain validity)

• Declaration of the donor's mental capacity and free will

• Affirmation that the gift will not render the donor insolvent.

• Correct signing (execution) of the deed - An attestation (signature section) for a deed under English law requires there to be a a witness who observes the deed being signed, who must also sign the deed to confirm they observed the signature, provide their name, address, and occupation and be independent (not a family member or beneficiary). The attestation clause typically states "Signed as a deed by [name] in the presence of:"

Solicitors for your deed of gift

The document should be prepared by a qualified solicitor to ensure it meets all legal requirements and achieves its intended purpose. This is particularly important where significant assets are involved or where inheritance tax planning is a key consideration. We offer a highly experienced and cost effective service. Please get in touch.