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Girish Babu (Doctor)     16 January 2010

Gift deed with life interset of parents, advice needed.

Dear experts, I would be grateful for your kind guidance on my issue.

I have constructed a duplex house, on the plot that my father owns. We are two chidren, and my sister has constructed a house on top of the existing house. So the entire building is still rgistered in my father's name. My parents now live in the lower house that I have constructed as I live overseas ( returning back in few years).

My father would like to make gift deed of the properies to me and my sister accordingly, However naturally requires security for himself too, and therefore we are considering the option of gift deed with life interest of my father. I wish to know if, thats the best way to go forward, and if yes what disadvantages could we have? Does capital gain tax apply when at a later point say after 15 years I wish to sell my part?

There is absoulte amicability between all of us, and we want to proceed for the best way method.

Thanks a lot in advance

Dr Girish Babu

 

 

 



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 5 Replies

R.R. KRISHNAA (Legal Manager)     16 January 2010

A Deed of Family Arrangement will also do good for such cases apart from gift deed.

Girish Babu (Doctor)     16 January 2010

Dear Mr RR Krishna,

Thanks for that. Can I ask, whether in any of these arrangements, will I or my sister be able to mortguage the concerned share to us for  bank loans, etc...?

Thanks

R.R. KRISHNAA (Legal Manager)     16 January 2010

Certainly you can mortgage your proportionate share with the bank.  You must get the deed registered, as registration for such arrangements is mandatory.

V. VASUDEVAN (LEGAL COUNSEL)     17 January 2010

 I would like to differ with Krishna's view point on mortgage. As per the proposal either settlement or gift deed the lift interest will be retained by  the father and the son and daughter interest are future, contingent. Hence the son/daughter cannot mortgage the property. The alternative way could be to take a joint loan in the name of the father jointly by son/daughter. Usually such arrangement may not be acceptable by banks and also should pose practical issues  in the long run. Since the buildings were constructed by son and daughters there could be an alternative - the right of the land can vest with father (life interest and interest in the respective floors can be transferred to the son/daughter. You need consult a property counsel with the relevant documents for precise process.

vasudevan

 

Girish Babu (Doctor)     17 January 2010

Thanks a lot, Mr Vasudevan.


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