I'm purchasing a property from my father. As stamp duty for Sale Deed is very high, I'm planning to opt for Gift Deed from my father. If the property is transferred into my name in the form of Gift Deed will it be treated as inheritance after the death of my father or will it be treated as my own self-acquired property? Can loan creditors treat this property as inheritance and have any right over this property after my father's demise if the property is already transferred via Gift Deed into my name when my father is alive? Will transfering the property via Sale Deed protect me from loan creditors of my father after his demise? Does transfering the property via Gift Deed have any disadvantage? I'm not in a good financial position to pay such high stamp duty for a Sale Deed and hence opting for Gift Deed on a no option basis. However, in reality I'm paying entire hefty amount to my father as sale consideration unofficially for the property. Property State: Telangana
Once a gift deed is executed and registered in your name, it becomes your absolute and exclusive property. As the transfer takes place during the lifetime of your father, it cannot be termed inheritance.
Your father's creditors cannot attach this property as it is not inheritance.
It is good that you pay the consideration to your father separately even though on record he gifts the property.
Much depends on whether the property is acquired by father of ancestral. If the property is ancestral father can gift the property only to the extent of his share in it. It seems father in indebted to creditors. Under such circumstances any transfer of property will be suspected as fraudulent made with intent to defeat or delay the recovery by creditors as provided under Section 53 of Transfer of Property Act, 1882. You best option is to go in for sale deed paying appropriate stamp duty with proof of payment sale consideration. You are paying full sale consideration, you can safeguard the property from creditors by executing a proper sale deed.
The property transferred to you by yor father by a registered settlement deed during his lifetime shall be construed as your own and absolute property, it canot be said to be an inherited property.
If this property do not reflect in the lawsuit filed by the creditors for recovery of their loan amount, then they cannot claim to attach this property neither they can challenge the transfer of this property to you because it was transferred to your name even before a suit was instituted.
By transferring this property to your name by a registered sale deed, you become an absolute owner of the property with clear and marketable title to the property, hence the creditors cannot even approach court to attach this property towards security for the loan amount especially if the property had been alienated by your father before the creditors have initiated the legal process for recover their loan amount.
Transfer of property by gift deed while your father is still alive is absolute and it won't be termed as inheritance. However, going by the information provided by you, it looks like your father has debts and in that scenario your father transferring the property by gift deed could give an opportunity to the creditors to go to the court terming it as a fraudulent transfer. So, it is better you go for a sale deed even though the stamp duty is higher as the chances of being pulled into litigation is lower here.
it would be treated as your self acquired property
2) creditors can file suit to set aside gift deed as made to evade creditors
3) sale deed is better as proeprty purchased for consideration and sale would not be set aside
4) since you apying father sale consideration better opt for sale deed
- Since , you are purchasing the property from your father after paying some consideration amount then a sale deed should be executed in your favour.
- Further, if you will registered a gift deed in your favour , then the amount will not mention therein in the deed , and hence there is chances other legal heirs will claim a right over the same after the death of your father.
- Further, if a gift deed , then creditors will have their right to recover the loan amount taken by your father.
- However, in both the cases this property would be considered as self acquired property .
Dear client,
if it is received as a gift then it will be treated as a self-acquired property and not an inheritance. Those creditors will not have any right over the property.
Thank you
Both sale deed and gift deed will attract stamp duty
your option is only Sale Deed if possible.
Gift Deed will not work in your case because there is debt.
Gift Deed is risky as it can be challenged and cancelled for debt.
So to save stamp duty, you will put it completely at risk.
The money paid separately will be also lost.
