Voluntary transfers are usually between related parties where one owner transfers property to another owner as a gift during their lifetime. No remuneration changes hands.

There are many circumstances where people start to consider doing a voluntary transfer of property. These range from where spouses own property in the sole name prior to marrying and once they marry, want the house to be in their joint names. Business owners who have their property in their joint names with a spouse want to protect their assets and so consider transferring the property to their spouse in the sole name. Also parties considering estate planning where property is in the spouse’s sole name, they are considering putting it into joint names to ensure the estate of the deceased is as small as possible.

Voluntary transfers can arise in many different circumstances, however, there are common aspects that must be considered by the parties contemplating such a transfer. They are as follows:

Is there a financial institution involved in the property e.g. do you have a mortgage?

If the answer to this question is yes, then you will need to liaise further with the mortgage holder and get their consent to this voluntary transfer. They are going to be a party in the transfer deed which will effect the transfer.

One of life’s certainties :- tax!

Like any transfer, tax will arise such as stamp duty, capital gains and capital acquisitions tax. You will need specific tax advice when entering into a voluntary transfer to ensure that your exposure here is fully understood. Of note and particular interest is that no tax arises on voluntary transfers between spouses and civil partners. Hence this is a very attractive mechanism to protect your assets and is often used in estate planning.

What is the real purpose of the transfer :- is it to defraud your creditors? If so, beware!

Under Irish law creditors have an ability to set aside voluntary transfers and so it is important to ensure that at the time the transfer is being contemplated and entered into, establishing solvency at the time of the voluntary transfer will ensure it withstands close scrutiny.

If your business is not solvent, proceeding with a voluntary transfer and executing such deeds is not an option; however for those who remain solvent, voluntary transfers may be an effective method of protecting their assets, depending on a range of circumstances.

Prior to proceeding down this path, you should consider if a creditor has any possible further claims against you/your business.

Under what circumstances can a voluntary transfer be set aside?

Bankruptcy, an intention to defraud creditors and NAMA applications where it can be proven that the intention was to defraud NAMA are all circumstances where a voluntary transfer may be set aside by a court.

If this article has triggered any questions for you were are happy help answer these simply call us at 061 502005 or email Roisin@rocs.ie

This article is general in nature and cannot be regarded as legal advice. It is general commentary only. You should not rely on the contents of this article without consulting one of our Solicitors. If you would like advice regarding how the law applies to your individual circumstances, then please contact Roisin O’Connell Solicitors.