WHAT IS TRANSFER BETWEEN LOVE AND AFFECTION IN MALAYSIA
This typically involves a gift transfer of property between individuals, such as a parent transferring property to a child or a spouse transferring property to their partner.
In Malaysia, the transfer of property under the influence of love and affection typically means the transfer is made without consideration—that is, no money is exchanged. These types of transfers are often seen in familial contexts or between close partners. Here’s a breakdown:
- Transfer of Property Due to Love and Affection
This refers to transferring property from one individual to another based on a personal relationship, such as family or romantic bonds, where no financial transaction (or minimal consideration) takes place. For instance, a parent might transfer ownership of a house to a child as a gesture of love.
Even if no monetary exchange happens, the Malaysian government still imposes stamp duty on such property transfers. The amount depends on the market value or the value declared on the deed, which may be a nominal value or the market value.
- Process of Transfer
The person giving the property and the person receiving the property will sign a Deed of Transfer/Memorandum of Transfer. In the case of love and affection, this deed may state that the transfer is a gift, and no monetary consideration is involved.
Registration: The transfer is then registered with the Land Office where title deed is updated to reflect the new owner.
No Consideration: The term “love and affection” means the transfer is made without any expectation of payment, although there might be some token payment to satisfy the legal requirement for “consideration.”
- Tax Implications
Gift Tax: Malaysia does not have a specific gift tax. However, the donor may be subject to real property gains tax (RPGT) if the property has appreciated in value and was sold within a certain period.
Stamp Duty: The key implication is stamp duty, which applies to the transfer, as mentioned above. This tax is calculated based on the property’s market value or the declared value, whichever is higher. There are exceptions for certain family transfers, but they are still subject to stamp duty.
- Common Scenarios of Property Transfer by Love and Affection:
Parent to Child: A common example is parents transferring their home or other assets to their children out of love and affection, often for estate planning or inheritance purposes.
Spouse to Spouse: A husband or wife might transfer property to their spouse as a gesture of love or during marital agreements.
Family to Family: A relative may transfer a property to another family member as a form of support or assistance.
- Considerations and Restrictions:
Inheritances: The transfer may affect the future distribution of an estate, especially in cases where the person who gives the property passes away and the transaction needs to be scrutinized for fairness among other heirs.
Mortgages and Liabilities: If the property has any outstanding loans or mortgages, these obligations must be addressed before the transfer is fully executed.
Legal Framework: Malaysian property law requires that all transfers of property are formally registered and comply with Strata Titles Act, National Land Code, and related regulations.
In summary, transfer of property for love and affection is common in Malaysia, especially within families or among close partners, and while no money is exchanged, the transfer is still subject to legal requirements, including stamp duty and registration with authorities.
