What is a Voluntary Transfer?
A Voluntary Transfer arises where a person transfer property usually to a family member. A deed of transfer is the legal document that transfers the legal estate or interest in property from the person giving the property (transferor) to the person receiving the property the (transferee) In this instance no money is exchanged between the parties as the transfer is carried out “for the natural love and affection” of the parties.
What if a Mortgage or Charge is registered?
If a mortgage or charge is registered on the property to be transferred, then in order to transfer the property from one party to the other, the mortgagor (the financial Institution owner of the charge) must either be joined in the deed of transfer, or the mortgage or charge must be discharged prior to the property being transferred. Therefore it is vitally important that searches are carried out, to enquire if there are any charges registered, before the property is transferred that was not brought to the attention of the solicitor prior to signing the deed of transfer.
Who may consider a voluntary transfer?
Generally, farmers will consider transferring their land to their son / daughter during their life time. The main reason being is that farmers would like the land to remain within the family. They also consider the possibility of their children building their home on the family farm and will transfer a site to that child to build their home.
In other circumstance where people decide to transfer property under a voluntary transfer are between husband and wife/ civil Partners.
In this instance one spouse may own the property in their sole name, and now wish to transfer the property into their joint names. Also parties consider estate planning where property is in the spouse sole name, they may consider transferring the property into their joint names to ensure the estate of the deceased is as small as possible as joint property passes directly to the other spouse under joint ownership.
Taxes – the elephant in the room, one of life’s certainties.
Like any transfer, taxes will raise it head such as stamp duty, capital gains, capital Acquisitions tax. However a note of particular interest is that no tax arises on voluntary transfers between spouses or civil partners. There are also tax incentives available to the farming community if you fall within the tax relief available. It is therefore imperative that you seek specific tax advice when entering into a voluntary transfer to ensure that your tax exposure is fully understood.
Can a Voluntary Transfer be set aside?
In one word, yes. For instance Bankruptcy, and intention to defraud creditors and NAMA. Where it can be proven that the it was the intention of the Transferor to defraud its creditors a court can set aside such transfers on an application of a creditor.
This article is general in nature and can not be regarded as legal advice, as it is commentary only. If you would like legal advice regarding how the law applies to your individual situation, then please do not hesitate to contact the Letterkenny office at Crawford Gallagher Solicitors. Contact details 074 916 4906 or email email@example.com