Transferring gifts and establishing joint ownership of assets by adding intended beneficiaries to property titles, while you’re still alive, are effective, and proactive estate planning tools. Why not give gifts while the appreciation for the gift can still be expressed? Through proactive estate planning, gifts may be given while alive or inter vivos, and by doing so, taxes and other duties that would be applicable to a probate or administration process on death, can be minimised and/or avoided. Proactive estate planning through inter vivos gifts can also eliminate the need for an application to the court for a grant of probate or administration to deal with those assets that were already gifted. This article will look at the two types of property; personalty, which includes things like cars, shares, bonds, bank accounts, and realty or real estate, that can be passed as inter vivos gifts.

Gifting Realty

Most property owners envision their real estate being left as a legacy to immediate family members or loved ones after their death. However, there are many benefits to gifting realty to loved ones without death having the final word. For example, to add a loved one to the title of your realty inter vivos, only a portion of your interest in the land is transferred to that loved one, causing Transfer Tax to only be payable on the value of that interest being transferred, as opposed to being payable on the value of the entire property. Additionally, transfers for love and affection, which are the kinds generally used to effect inter vivos gifts, attract reduced registration fees at the Titles Office. These benefits can also be coupled with certain exemptions that exist under the Transfer Tax Act for a transfer of the “matrimonial home” between husband and wife, or the “family home” between certain family members.  

Gifting PersonaltyGifting personalty is where most of the benefits of inter vivos gifts may be derived. Gifts under this heading usually attract nominal taxes, and in some cases, no taxes, and are quite easy to transfer. Motor vehicles, for example, may be transferred at any tax office for minimal costs. In relation to bank accounts, investment instruments, and the like, transferring these while alive, or establishing joint ownership of them, would eliminate the need for an executor or administrator to wait on a grant of probate or administration to deal with these assets after death. As far as shares in companies are concerned, giving these, inter vivos, is of significant benefit because they attract Transfer Tax on their value, which may increase over time, and after death. Gifting the shares at a lower present day value could potentially save the intended beneficiary costs and taxes. It is also good to note that, shares traded on the Jamaica Stock Exchange are exempt from Transfer Tax and can also be easily gifted inter vivos.