Donation of movable property: how to draw up a gift agreement

Contract of donation of real estate in favor of relatives

The gift transaction, due to its gratuitous nature, presupposes the existence of a trust relationship between the parties. This kind of connection most often occurs between relatives.

Among them, it is worth highlighting close relatives, since the deed of gift in their favor has some features, for example, for tax purposes. So, among the close Art. 14 of the Family Code of the Russian Federation includes all first-degree relatives:

• children and parents (adopted and adoptive parents),
• grandmothers,
• grandfathers,
• grandchildren,
• siblings and half-brothers.

Spouses should also be included in this list, although they are not considered relatives and are only family members.

By concluding a deed of gift for real estate in favor of the specified persons, the donor transfers or undertakes to transfer to them an object that is his personal property: an apartment, house, cottage, garage, land plot, non-residential premises and other real estate or part thereof.

Since rights to real estate are subject to state registration, the property of the donee will become the property only at the time of registration.

Please note: the transaction of donation in favor of relatives has some peculiarities in terms of taxation, which we will touch upon later.

Gift deed for real estate to a stranger

Although donations in most cases are made between relatives, there are exceptions. If a deed of gift for property is drawn up in favor of other persons who are not related or have family relations with the owner of the property, the transaction proceeds according to the general procedure. There are no exceptions.

By the way, a deed of gift for real estate between strangers is often drawn up to cover up a purchase and sale transaction. In fact, such an agreement does not contain conditions for the transfer of money to the donor, otherwise it will not pass state registration, but in fact, due to these circumstances, it will be feigned, and therefore void.

The initiator of the illegal registration of the sale and purchase is usually the seller, since this will allow him to avoid paying personal income tax on the proceeds from the sale. However, the donee, who in fact is the buyer, must pay it.

Procedure for drawing up a donation agreement

The agreement of the parties to the deed of gift on the donation of this or that property, by virtue of Art. 572 of the Civil Code, requires the conclusion of a gift agreement. Since the registration of a deed of gift for real estate contains a number of nuances, in particular regarding the re-registration of rights to it, for the agreement, according to Art. 574 of the Civil Code, a mandatory written form is provided.

To confirm the legality of the transaction, many practice notarization of the agreement, but it is not mandatory.

An analysis of contractual practice for donating real estate allows us to identify several significant stages of registration:

1. Preparation of documentation. The thoroughness of this stage directly affects the outcome of the transaction.
2. Drawing up the text of the contract. An equally important stage, since the legal force of the document depends on the literacy of its drafting. In addition to the standard ones, you should include mandatory details: the subject of the donation, the terms of the transfer, and so on. The drafting of the text should be entrusted to a lawyer. The agreement must be drawn up in at least three copies.
3. Signing the contract. The document must be signed by all parties to the donation at once.
4. State registration of rights. Carried out at the Rosreestr branch at the location of the property.
5. Payment of income tax. Required only in the case of a gift between unrelated persons.

Specifics of the deed of gift

According to Art. 572 of the Civil Code, a deed of gift is a gratuitous transaction. It involves the transfer or promise of transfer of property, as well as the release or promise of release of the donee from some property obligations.

By receiving a gift, the recipient becomes its owner, and he does not have any obligations to the donor.

The recipient becomes the owner of the gift from the moment it is received, but in the case of real estate - from the moment the transfer of rights is registered in Rosreestr.

Another feature of a gift is that it does not form the common property of the spouses, which is especially important when donating in favor of a married person.

Basic requirements for a gift agreement

Since a deed of gift for real estate necessarily requires registration of the transfer of rights, a number of essential conditions and requirements regarding form and content must be met:

• the agreement must be drawn up in writing, otherwise it will not be able to register;
• the document must contain a number of traditional characteristics: names and passport details of the parties, the date and place of its conclusion, rights and obligations, and so on;
• essential condition, according to Art. 432 of the Civil Code, is a condition on the subject. This condition requires a detailed description of the gift itself, its characteristics, location, address, cadastral number and other metrics. Without specification, the contract will be void;
• the text of the agreement cannot contain counterclaims to the donee; a condition must be provided that the gift is gratuitous;
• no less important is the description of the method and moment of transfer of the gift, mention of the place of its transfer, the conditions for returning the gift, and other conditions;
• according to Part 3 of Art. 572 of the Civil Code, the contract cannot contain a promise to transfer a gift after the death of the donor.

Apartment donation agreement

An apartment is one of the types of real estate, therefore all the requirements specified above are imposed on the transaction of donating it. In addition, there are certain restrictions on donating apartments that are in common or joint ownership.

On significant shortcomings of the apartment, according to Art. 580 of the Civil Code, the donor is obliged to warn the donee.

To document the transfer of real estate, in accordance with Art. 556 of the Civil Code, it is advisable to draw up a transfer act. Find out more about what an apartment donation agreement is.

Garage donation agreement

Russian legislation does not contain specific wording for such a building as a garage, therefore we consider it a non-residential premises equipped for parking and repairing vehicles. The features of its design, location and quality of construction affect the nuances of its civil circulation, in particular, how a deed of gift for a garage is drawn up between close relatives.

If the object corresponds to the characteristics specified in Art. 130 of the Civil Code, it can be considered real estate, otherwise – a movable thing.

The main criterion that will determine a garage as real estate is a strong connection between the building and the ground, which can be realized through a foundation. If it is an easily portable or dismountable metal structure, it is considered a movable thing.

Since this is extremely important, before you issue a deed of gift for a garage, clarify which of the objects of civil rights it relates to. If the garage is real estate, donating it will require technical documentation, adherence to strict form, registration of rights, and so on.

In addition, such a gift, according to Art. 35 of the Land Code, will require the transfer of rights to the land plot, which is located under the garage.

If this object is located in a garage-building cooperative, a deed of gift for the garage to the son, according to Art. 218 of the Civil Code, is possible only after full repayment of share payments.

Form of agreement for donation of movable property

The general rule for concluding gift agreements is contained in paragraph 1 of Article 574 of the Civil Code. In accordance with it, they can be made orally, which involves the transfer of a gift through the delivery of a specific thing to the donee, a symbolic transfer (for example, keys to a vehicle) or title documents.

At the same time, paragraph 2 of this article establishes rules requiring mandatory written form when concluding agreements for the donation of movable property in the following cases:

1. If the donor is a legal entity, and the value of the gift is at least three thousand rubles;
2. If the contract contains a promise to make a gift in the future.

Therefore, we can conclude that real contracts, the parties to which are individuals who are not registered as individual entrepreneurs, or when such persons act on the side of the donor, can be concluded orally . However, such transactions, if controversial issues arise, are problematic to challenge in court, since there is no written confirmation of their lawful completion.

Often, donation agreements are certified by a notary , although the Civil Code does not contain conditions requiring this. Moreover, if the document was drawn up correctly and the parties were legally capable, then notarization does not significantly affect the court’s decision in cases of challenging the transactions in question.

Important

When drawing up a contract for the donation of movable property in writing, it is necessary to comply with all the requirements for its content. In this case, the main essential condition is an indication of the specific subject of the donation - be it a thing, a right or a release from an obligation.

Special requirements are established by paragraphs 1 and 2 of Article 389 of the Civil Code and paragraph 2 of Article 391 of the Civil Code for the form of gift transactions for the transfer of property rights in relation to third parties (assignment of claims) and for release from property obligations to third parties (debt transfer). Such agreements are concluded in simple written or notarial form .

Required documents for donation

To formalize the agreement, the parties to the donation must have in hand:

• documents proving their identity;
• documents confirming the donor's ownership: certificate of ownership, purchase and sale agreement;
• state registration certificate;
• technical and cadastral passports;
• extracts from the Unified State Register and house register;
• peer review report;
• documents confirming blood relationship or marriage of the parties.

The list of documents is not complete and exhaustive - the specific package is selected on an individual basis.

Where to issue a deed of gift

The legislation does not oblige the parties to the deed of gift to take any special steps when registering it. Having a package of necessary documents in hand, the parties can draw up an agreement on their own. However, to ensure the legality of the contract, it is recommended to contact a lawyer or notary.

Personal income tax on gift

Receiving a gift in the form of real estate is equivalent to receiving income, which, according to Art. 210 of the Tax Code, is subject to income tax.

Tax on gifted real estate in 2021, according to Art. 224 of the Tax Code, is 13% of the value of the object, established as a result of an assessment by an expert.

Payment of tax, by virtue of Art. 228 of the Tax Code, requires them to independently calculate the amount of tax, submit an income declaration to the Federal Tax Service and then pay the tax.

Please note that the need to pay tax when donating real estate arises only for recipients who are not relatives of the donor: blood relatives and spouses are exempt from such obligation (clause 18.1 of Article 217 of the Tax Code).

This approach is due to the actual lack of income, since the gift remains within the family budget. In addition, the presence of kinship, according to Art. 22.1 of the Fundamentals of Notary Legislation is the basis for the application of a special tax rate. Notarization of such an agreement is not mandatory.

Tax on gifts of movable property in 2021

Since as a result of making a donation, the donee receives movable property without spending personal funds, the Tax Code of the Russian Federation (Article 248, paragraph 2) classifies this as a person receiving profit, which is still subject to taxation in 2021 (personal income tax). However, the legislator provides special benefits, which many citizens simply do not know about.

First of all, it is necessary to note cases of gifts between individuals in kind or cash. In this case, the donee is exempt from paying tax. In addition, regardless of the type of gift object, donees who are close relatives of the donors are exempt from taxation. You can find a complete list of persons included in this category today in Article 14 of the Family Code of the Russian Federation.

Expert opinion

Oleg Ustinov

Practicing lawyer, author of the website “Legal Ambulance”, one of the co-founders of the “Our Future” foundation.

Citizens who are not relatives, but act as parties to gift transactions, are required, after receiving movable property, to submit the appropriate tax return, and then pay an amount equal to 13% of the total market value of the subject of the gift. However, this rule does not apply to property whose actual value is less than 4,000 Russian rubles.

It is worth noting the fact that when an individual receives a gift from a legal entity that is his boss/employer, taxation is made from the salary of the recipient. In the event that management is unable to make payment, it is obliged to notify the tax office in writing of the amount of tax, after which the employee must pay the tax within the deadlines established by the legislator. We described this situation in more detail in the article on donating to an employee.

At the same time, we note that the donor of movable property, who is a legal entity:

• does not pay income tax (NDFL), since actual expenses in the form of the cost of the gift, as well as the costs of its gratuitous transfer, are not considered income (16 paragraph 270 of Article of the Tax Code of the Russian Federation);
• pays value added tax (VAT), since the gratuitous transfer of movable property is equated by the legislator to the sale of this property (1 subparagraph 1 of paragraph 146 of Article of the Tax Code of the Russian Federation).

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All legal entities receiving movable property under a gift agreement are required to take into account its total market value as part of non-operating income. This is necessary for calculating tax, in accordance with paragraph 8 of Article 250 of the Tax Code.

When assessing income, it is necessary to be guided by the market price for an object similar to the one received at the time of the transaction, taking into account the provisions of Article 40 of the Tax Code of the Russian Federation. At the same time, the established cost must be documented.

State registration of deed of gift for real estate

Previously, all deeds of gift for real estate were subject to state registration, but Federal Law No. 302 dated December 13, 2012 abolished this norm for all contracts concluded after March 1, 2013.

Now only the transfer of rights to real estate to the donee is subject to state registration. To do this, the parties to the donation must contact the Rosreestr branch at the location of the property and provide the state registrar with:

• application for state registration;
• receipt of payment of state duty;
• identification documents;
• 3 copies of deed of gift;
• documents necessary for execution of the contract.

According to Art. 13 Federal Law dated July 21, 1997 No. 122, registration of the transfer of rights is carried out within 10 days from the date of submission of documents.

On the procedure for transferring movable property by deed of gift in 2021

Since the deed of gift refers in jurisprudence to bilateral transactions, the main condition for the transaction is the fulfillment by the donor of his obligation to transfer the gift to the donee. At the same time, the legislator provides for 2 types of such transfer in 2021 :

1. direct transfer of movable property “from hand to hand”;
2. symbolic transfer of an object, when instead of the gift itself, the donor gives at the conclusion of the agreement some attribute related to the gift (for example, title documents for a house or car keys).

In our article on donating shares, we have already mentioned that the transfer of rights to securities (which also belong to movable property) can be carried out only after they are written off from the donor’s account and entered into the personal account of the recipient.

At the same time, regardless of which of the 2 methods of transferring the gift the parties have chosen, property that requires official state re-registration of ownership becomes part of the donee’s property only after this procedure has been carried out in the relevant authorities (for example, when donating a car, its registration in traffic police).

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However, the choice of transfer procedure may depend not only on the type of movable property, but also on the subjective composition of the parties to the donation. Thus, all transactions made by legal entities must, according to the current Russian legislation, be concluded exclusively in writing, and the transfer of the object of donation between two commercial organizations (for example, between the main and a subsidiary) occurs by writing off the property from the donor and registering it with side of the donee.