Gift
Legal act by which a person transfers a property free of charge to another person during their lifetime.
Full definition
A gift is a contract by which the donor transfers ownership of a property to the donee (beneficiary) during their lifetime and free of charge. It makes it possible to anticipate the transfer of wealth and to optimise inheritance taxation.
There are several types of gift: the simple gift (immediate transfer of ownership), the gift with reserved usufruct (the donor retains the use of the property until their death), and the gift-sharing (distribution among several heirs). Each form addresses different wealth objectives.
In Luxembourg, property gifts are subject to registration duties that vary according to the family relationship: 0% in the direct line in certain cases, up to 14,4% between non-relatives. The gift with reserved usufruct is particularly advantageous as the duties apply only to the bare ownership, the value of which is reduced according to the donor's age. A notarial deed is mandatory for property gifts.
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Related terms
Inheritance
Transfer of a deceased person's wealth to their heirs according to legal or testamentary rules.
Dismemberment of Ownership
Legal division of ownership between usufruct (right of use and income) and bare ownership (ownership without enjoyment).
Usufruct
Right to use a property and receive its income (rents) without owning it, more extensive than the right of use and habitation.
Inheritance Tax
Taxes levied by the State on the transfer of wealth on death, varying according to the family relationship.
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