Glossary · UK
What is Deed of Gift?
A formal legal document recording that someone has given an asset -- such as money, property or valuables -- to another person as an outright gift, with no payment made in return.
Full Definition
A deed of gift is a formal legal document used to record that a person (the donor) has voluntarily transferred ownership of an asset -- which might be a sum of money, a property, shares, or other valuable possessions -- to another person or people (the donee) as an outright gift, without receiving payment or other consideration in return. While a deed of gift is not always a strict legal requirement for every type of gift (transferring cash by bank transfer, for example, does not usually require one), it is widely used, and often specifically recommended by solicitors and financial advisers, because it creates clear, dated, signed evidence of the gift, the parties involved, and the fact that no money changed hands, which can be important later for Inheritance Tax purposes and to avoid disputes among family members or other beneficiaries after the donor's death. This evidential role matters most in the context of the seven-year rule for Potentially Exempt Transfers: because a lifetime gift can still be brought back into a deceased person's estate for Inheritance Tax if they die within seven years of making it, executors often need to prove exactly when a gift was made, of what, and to whom, and a properly executed deed of gift is one of the clearest ways to establish that evidence. A deed of gift transferring land or property must be signed as a deed (witnessed, in the correct legal form) and, for registered land, will usually need to be registered with HM Land Registry to formally update legal ownership.