Gift (law)
Encyclopedia
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, the donor must have intended to give the gift to the donee (donative intent), and the gift must actually be delivered to and accepted by the donee.
Gifts can be either:
Gifts can also be:
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 (albeit inadvisedly) demand the ring back on the day 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.
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 actually 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
(s. 52, Law of Property Act (1925)). The transfer of equitable interest
s 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.
see Gift tax in the United States.
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
of property
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
, is the voluntary transfer of property from one person (the donor or grantor) to another (the donee or grantee) without full valuable consideration
Consideration
Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...
. In order for a gift
Gift
A gift or a present is the transfer of something without the expectation of receiving something in return. Although gift-giving might involve an expectation of reciprocity, a gift is meant to be free. In many human societies, the act of mutually exchanging money, goods, etc. may contribute to...
to be legally effective, the donor must have intended to give the gift to the donee (donative intent), and the gift must actually be delivered to and accepted by the donee.
Gifts can be either:
- 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
- deathbed gifts (gift causa mortis, donatio mortis causaDonatio mortis causaA donatio mortis causa is a gift made during the life of the donor which is conditional upon, and takes effect upon, death...
) - a future gift made in expectation of the donor's imminent death. A gift causa mortis is not effective unless the donor actually 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 terminable condition.
Gifts can also be:
- outright - made free of any restrictions, such as being subject to a trust;
- onerous - made with a burden or obligation imposed on the donee; or
- remunerative - made to compensate for services rendered
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 (albeit inadvisedly) demand the ring back on the day 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 deedDeed
A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed...
or key
Key (lock)
A key is an instrument that is used to operate a lock. A typical key consists of two parts: the blade, which slides into the keyway of the lock and distinguishes between different keys, and the bow, which is left protruding so that torque can be applied by the user. The blade is usually intended to...
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
Key (lock)
A key is an instrument that is used to operate a lock. A typical key consists of two parts: the blade, which slides into the keyway of the lock and distinguishes between different keys, and the bow, which is left protruding so that torque can be applied by the user. The blade is usually intended to...
that does not actually 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
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
, real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
must be transferred by a written deed
Deed
A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed...
(s. 52, Law of Property Act (1925)). The transfer of equitable interest
Equitable interest
An equitable interest is an "interest held by virtue of an equitable title or claimed on equitable grounds, such as the interest held by a trust beneficiary." The equitable interest is a right in equity that, if violated , is subject to satisfaction...
s 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.Revocation
A donor may revoke a future gift, however a gift delivered and accepted cannot be revoked.Gift 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 and the aggregagte of gifts received exceeds Rs 50,000 in a year, the gift will be taxable as income from other source. For the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
see Gift tax in the United States.