A deed of gift is a legal document that transfers ownership of property from one person (the donor) to another (the donee) without any payment or consideration in return. In Singapore, deeds of gift are commonly used to transfer property between family members or close friends. If you are considering gifting property in Singapore, it is important to understand the legal requirements and implications of a deed of gift.
What is the Purpose of a Deed of Gift?
A deed of gift is used to transfer ownership of property without any payment or consideration in return. This can be done for a variety of reasons, such as:
- To transfer property to family members or close friends
- To provide financial assistance to a loved one
- To avoid probate or estate taxes
What are the Requirements for a Valid Deed of Gift?
To be valid, a deed of gift must meet the following requirements:
- It must be in writing
- It must be signed by both the donor and the donee
- It must be witnessed by two independent witnesses
- It must contain a description of the property being gifted
- It must be stamped with the appropriate stamp duty
What are the Stamp Duty Implications of a Deed of Gift?
Stamp duty is a tax that is payable on the transfer of property in Singapore. The amount of stamp duty payable depends on the value of the property being gifted.
What are the Tax Implications of a Deed of Gift?
There are no capital gains tax implications for the donor when they gift property. However, the donee may be liable to pay stamp duty on the property if the value of the property exceeds S$1 million.
What are the Benefits of Using a Deed of Gift?
There are a number of benefits to using a deed of gift to transfer property, including:
- It is a simple and straightforward process
- It can help to avoid probate or estate taxes
- Stamp duty may be reduced if the property is being transferred to a close family member.
What are the Risks of Using a Deed of Gift?
There are also some risks associated with using a deed of gift to transfer property, including:
- The donor may lose control of the property once it has been gifted
- The donee may be liable for any debts or liabilities associated with the property
- If the donor changes their mind, they may not be able to revoke the deed of gift
Conclusion
A deed of gift can be a useful tool for transferring property between family members or close friends. However, it is important to understand the legal requirements and implications of a deed of gift before you proceed. If you are considering gifting property, it is advisable to seek legal advice.
