How to draw up a contract for donating a car to your son

A car donation agreement (deed of gift) is the primary document that you will need if you want to give a car as a gift, including to a close relative. In this material we will tell you about all the intricacies of how to draw up a deed of gift for a car, taking into account all the nuances, and in the article you will also find a form and a sample of a car donation agreement (deed of gift) for 2020.

Donation of property is a gratuitous transaction. That is, the person transferring the property does not receive anything in return. An analogue of a deed of gift is a will, but with significant differences. Despite the lack of material benefit for the donor, a gift agreement is a common type of transaction between Russians. We will discuss later how to issue a deed of gift for a car.

Motives for registering a donation

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• A thorough study of the issue does not always guarantee a positive outcome. It depends on many factors.

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Donating a car is compared to selling it. The purchase and sale transaction is financially more profitable for the donor, since payment is made. However, in some cases, a deed of gift is more relevant. The gratuitous nature of the transaction gives rise to the absence of the second spouse’s right to the car, since the donated items are not joint property. As a result, the car will not be divided during a divorce and it will not be confiscated in the event of personal debts from the second spouse.

Registration of a deed of gift for a car instead of transferring it under a will will allow you to exclude the car from the inheritance. This is relevant if there is no will or there are heirs who are entitled to an obligatory share. An additional factor will be the fact that the donor - the owner of the property - can personally control the transfer of the gift, which is impossible during inheritance.

Another motive for registering deeds of gift may be the distribution of property in marriage. The spouses register the property personally, and subsequently there is no need to divide the property or draw up a marriage agreement. In general practice, such situations are rarely encountered.

Restrictions and conditions of the transaction

The law defines the criteria for the legality of donating a car. In order for the registration of a deed of gift for a car to be recognized and the transfer of ownership rights to take place without complications, the conditions must be met.

1. The car must not be encumbered. It is prohibited to donate property that is pledged or under arrest.
2. The donor must be the full owner and have legal capacity.
3. The conclusion of a transaction is possible exclusively on a voluntary basis. Any form of coercion is not allowed.
4. The presence of the consent of the spouse if the donor is married. A priori, it is considered that the spouses act in mutual interests and it is not necessary to obtain written consent. However, in practice, the transaction can be challenged if the donor knew that the spouse was against the transaction.
5. The recipient of the gift is an individual. Donation to a legal entity is unacceptable.
6. Written form of the agreement. How to draw up a deed of gift for a car – notarized or not – depends on the wishes of the parties involved. The law does not oblige the parties to enter into a written agreement. In fact, the transaction can be carried out verbally, but it will be impossible to register ownership of a car without written evidence. The deal will need to be legalized in court.
7. You cannot donate a car on behalf of a minor owner by its official representative.

The law does not prohibit donating a car by proxy. But in practice this is rarely used. For a transaction to be recognized as legal, the representative must have a power of attorney, giving him the free right to dispose of a specific car.

The right to ownership occurs after state registration of the new owner of the car. Registration must be completed within 10 days from the date of registration of the transaction. Otherwise, a fine will be charged.

If we go into detail, the car gift agreement is considered completed if the parties have fulfilled their obligations and the subject of the gift can be fully determined. If we consider a car, then registration documents are necessary to identify it. If the car is deregistered, which is not mandatory, then it must be registered. Formally, if the object of the gift - a car - is transferred in a ceremonial atmosphere and all documents for the car are available, then Art. 458 Civil Code of the Russian Federation. That is, the contract is considered completed. But if the donor wishes to return the gift before the state registration of the new owner, then he can do this under the right of Art. 577 Civil Code of the Russian Federation. Especially if the donation took place orally. After entering the data into the vehicle passport, the recipient of the gift can completely dispose of the car: sell, donate, bequeath. Cancellation is no longer possible, only legal challenge.

A donation is a transaction taking place on the basis of a gift agreement (Article 572 of the Civil Code of the Russian Federation). This agreement is subject to rules that are common to all types of transactions. Art. 223 of the Civil Code of the Russian Federation determines that the moment the acquirer receives the right to a thing is the moment of its transfer. The procedure for transferring things under a contract is stated in the following paragraph. Art. 224 of the same Civil Code of the Russian Federation. According to clause 1, the moment of concluding the contract = the moment of transfer of the thing, subject to receipt of possession. The same rule applies to consensual transactions. That is, promises to give, like the ceremonial presentation of keys at weddings.

In simple terms. If you don’t want the donor to return the car, register it. For the rest, prove in court that the item is owned, but not registered.

List of documents when preparing a deed of gift from a notary

To register a deed of gift with a notary, the donor needs:

• car purchase and sale agreement or any document confirming ownership;
• documents confirming the identity of the persons who entered into the transaction;
• a statement expressing the will of the donor in the form of transferring property to another person;
• a statement from the recipient, in which he expresses his desire to accept the gift and register his rights as the new owner;
• certificate of an appraisal examination to determine the real value of the car;
• a receipt confirming payment of the state duty;
• technical passport of the car and certificate of registration;
• an extract from the traffic police (necessary to confirm that the car is not encumbered with anything and that no restrictions are imposed on its use);
• consent of the second spouse to the transfer of property as a gift.

The notary checks the submitted documents and then gives the applicant an application form to fill out.

Car donation procedure

The algorithm for how to draw up a donation agreement for a car is simple. The procedure for donating a car occurs in a shorter period of time than donating real estate. When the parties were able to agree on the conditions: the donor wished to transfer and the recipient to accept the gift; The parties draw up a gift agreement, sign the agreement, hand over documents for the car and keys. Afterwards, the recipient of the gift has a ten-day period to register the car. This must be done regardless of the circumstances of receipt of the car.

The right to ownership, including disposal, does not begin when the deed of gift for the car is issued, but from the moment of registration with the traffic police. Until then, the donor is considered the owner of the car. If the donor dies before registration is completed, the car becomes part of the estate and the transaction is canceled. In some cases, this can be challenged in court by recognizing the gift transaction as legal.

Do you need a notary?

Notarization of a car donation agreement is not required by law. This measure is entirely voluntary. The parties must mutually desire notarization of the transaction. Arguments in favor of the participation of a notary are:

• verification and confirmation of the participants’ legal capacity;
• verification and confirmation of the identity of the parties;
• analysis of the gift agreement for legality;
• checking title documents for cars.

A negative argument is how much a deed of gift for a car costs from a notary. Transaction costs will increase. You will need to pay a fee, technical consulting services and assistance in drawing up a contract. Since the duty is paid as a percentage of the cost of the car, it is necessary to conduct an expert assessment to determine the price of the car.

Documents for donation

The key to how to draw up a donation agreement for a car is the collection and preparation of the necessary documents. To enter into an agreement, the donor and recipient of the gift will need:

• 3 copies of deed of gift; (here you can sign a gift agreement for a car for 2020)
• participants' passports;
• vehicle passport;
• vehicle registration certificate;
• insurance policy;
• title papers for cars;
• act of acceptance and transfer;
• confirmation of the absence of encumbrances.

The same set of documents, with the exception of the donor’s passport, is also prepared for registering a car with the traffic police under a gift agreement. Additionally, a receipt indicating payment of the fee must be presented. If necessary, the consent of the donor's spouse to the transaction is prepared. It is recommended that the spouse's consent be notarized.

Nuances of drawing up a contract

Since the fact of how to draw up a deed of gift for a car is clear - in writing, it is necessary to determine the structure of the gift agreement and its mandatory elements. If the parties do not want to contact a notary or lawyers to draw up an agreement, then they can use the standard deed of gift form. It is important to ensure that the required elements of the form are present:

• Name;
• date and place of compilation;
• information about the parties to the transaction;
• registration information about the item - the car;
• circumstances of the transaction;
• moment of car transfer;
• full details of the parties;
• signatures of the parties to the transaction.

It is important in the donation agreement (deed of gift for a car) to describe in detail the object of the gift, indicating all the elements of the car necessary for identification: color, model, make, year of manufacture, registration number, etc. If the transfer of the car does not occur immediately, then the transfer and acceptance certificate may act as a separate document and not as an annex to the main agreement. These features are reflected in the text of the deed of gift. The agreement also stipulates additional property donated along with the car, for example, automotive equipment, spare tires.

Donating a car is a standard type of contract. There are no special requirements for drawing up an agreement, except for those that apply to gratuitous transactions. That is, it is not allowed to indicate in the contract the circumstances of compensation to the donor. In this case, the transaction will be a sham – invalid.

The gift agreement is drawn up in the required number of copies. Minimum – 3. One for the parties and one for registering changes in MGTORER. If the agreement is drawn up by a notary, then another copy of the deed of gift is prepared, which will be kept in the files of the notary’s office. The contract form can be filled out on a computer or by hand. Corrections, strikethroughs and other edits are not allowed.

The law (Article 578 of the Civil Code of the Russian Federation) gives the parties the right to reflect, when drawing up a deed of gift, the donor’s right to return property in the event of the death of the donee. If this rule was not taken into account by the parties before drawing up a donation agreement for a car, then the return of property due to death will be impossible. Since the recipient of the gift may be a minor citizen, then in the case of the participation of a minor, information about his representative is entered into the gift agreement. The guardian/representative also certifies the deed of gift with his signature. In such situations, it is optimal to carry out notarization of the gift agreement.

Gift evaluation

An expert assessment of the value of property transferred by deed of gift is mandatory if the notarial option of registering the transaction is chosen. An estimate is required to determine the amount of the notary fee. A company or person licensed to conduct appraisal activities has the right to conduct an expert assessment of the value of a car. An independent assessment of the value by the parties to a gift agreement drawn up by a notary is unacceptable.

Legal basis

Donation transactions are carried out in accordance with the provisions of Chapter 32 of the Civil Code of the Russian Federation. A car is an expensive property (more than 3 thousand rubles), its free transfer requires written registration (Article 574 of the Civil Code of the Russian Federation). A deed of gift may imply the immediate delivery of a car, or a promise to transfer the vehicle in the future. The condition of the contract - to give a car after the death of the donor - is unacceptable. In this case, all property passes to the heirs of the deceased, and the document is considered void.

The gratuitous nature of the transaction presupposes the absence of a counter-property obligation from the recipient party. If this condition is violated, the agreement is not a donation; the rules corresponding to the actual norms of the agreement will be applied to the transaction - agreement of exchange, purchase and sale, etc. The agreement of donation of movable property must include a clearly formulated desire of the donor to give the car to the donee for free and indicate a specific transport means.

Sometimes a gift of a car is carried out instead of a purchase and sale transaction, in which both parties receive benefits: the seller - in the form of non-payment of tax on the sale of the vehicle, the buyer - by avoiding the division of the car in a divorce. In order for an agreement to be considered a gift, the agreement must not contain any reference to the money being transferred. The buyer bears the risk of being left without money and without a car if the donor terminates the contract.

Restrictions

A car donation agreement can be drawn up between citizens or between an individual and an organization. Gifts from commercial companies to each other are not permitted (Clause 4, Article 575 of the Civil Code of the Russian Federation). However, if one of the parties to the transaction is a non-profit organization, issuing a deed of gift for the car is acceptable. Legal entities can give valuables with the consent of the owners.

Donation permission must be obtained if the vehicle is jointly owned. Thus, the consent of the husband/wife is required to carry out the operation in the case where the car was purchased during marriage and is not considered the sole property of one of the spouses (under a marriage contract or agreement on the division of property).

Valuable gifts to employees of the education sector, employees of medical organizations, social institutions from persons who are in their care, maintenance or treatment are prohibited. Offerings from relatives of these citizens are unacceptable. Gifts to civil servants and municipal employees related to their position are prohibited.

Termination of an agreement

The recipient may refuse to accept the gift before receiving it. The donor has the right to terminate the contract:

• in the event of an attempt on the life of the donee of the donor or his relatives, as well as in the event of injury by the donee to one of them;
• if, due to the actions of the donee, the loss of the donated vehicle, which is valuable to the donor in intangible terms, is possible.

Termination of a transaction involving the transfer of a vehicle in the future is possible if:

• there have been changes in the donor’s family life, financial situation, and health, as a result of which the transfer of the car will significantly worsen his living conditions;
• the donee has committed illegal actions leading to the cancellation of the contract.

If the donor dies, the heirs must fulfill his obligations under the car donation agreement. When the donee dies, his heirs do not receive rights under the transaction, unless there is another rule in the agreement. A car that has already been transferred to the donee at the time of his death is included in the inherited estate under general conditions.

Gift to a close relative

A deed of gift for a car between close relatives does not differ from the standard form in terms of the content of the agreement. Regardless of the presence of a family connection, it is necessary to draw up an agreement, sign it, and register the right to the car with the traffic police. The deadlines and requirements are identical. However, a car gift between close relatives is not subject to tax. But registration costs are charged in full. To minimize donation costs, it is recommended to sell the car after three or more years of ownership after receiving it as a gift. In this option, relatives will only need to pay registration costs.

Taxation of a gift agreement

According to the Tax Code of the Russian Federation, gratuitous transactions are recognized as income and property received through them is taxed. The amount of gift tax is determined by the personal income tax indicator in Russia. Currently, personal income tax is 13%. Tax is collected from the recipient of the gift, but the donor does not pay tax payments. But a car donation agreement between close relatives gives the right to tax exemption. Close relatives are:

• children;
• parents;
• brothers/sisters;
• grandchildren;
• spouses;
• grandmothers/grandfathers.

Nephews, aunts, guardians, stepdaughters (stepsons) and stepfathers (stepmothers) do not receive the benefit. But half-sisters/brothers, adopted children and adoptive parents are equal to the rights. The tax benefit for the sale of a car received as a gift begins to apply when the car has been owned for at least 3 years. If the minimum period has not been reached, then when selling a donated car, personal income tax is charged in full - 13% of the transaction value. The purchase and sale transaction of donated property is subject to the rule giving the right to a property deduction.

What tax will you have to pay?

If the parties to the transaction are not relatives

If you are not related to the owner of the car and received a car as a gift, you will have to report (file a tax return) for the next year and pay the state a tax of 13% on the amount of the gift.

If the gift is between close relatives

A deed of gift for a car is not subject to tax if it is issued between close relatives (see gift tax):

• Spouses
• Parents or adoptive parents
• Grandparents, grandchildren and granddaughters
• Children (natural and adopted)
• Brothers, sisters (half, full)

That is, aunts, uncles, nephews, cousins, etc. do not fall under this condition and pay tax according to standard rules.

To confirm the relationship, supporting documents (marriage certificate, birth certificate, passports, etc.) are submitted to the traffic police (and if requested by the tax authority). Cm.

as well as how to pay tax when selling a car that has been owned for less than 3 years.

If the donee is a relative, but sells the car before 3 years of ownership

We invite you to familiarize yourself with the procedure for adopting a child: documents, procedures

However, when deciding on a gift, you should weigh the possible risk of tax payment by the donee (even a close relative). If the sale of the gifted car occurs after 36 months of ownership, the owner will be exempt from taxation. But if he decides to sell the car immediately or within the next 3 years, he will have to pay a tax of 13% on a general basis:

• At the same time, he cannot take advantage of the expenses for the purchase of a car (they were made not by him, but by the donor).
• But he can take advantage of a property deduction of 250,000 rubles. That is, if the recipient sells the donated car before 3 years of ownership and for more than 250 thousand rubles, then he must pay 13% to the budget from the difference in excess of the sale amount and the deduction.

Example: A father gave his son an expensive car in 2020, then the son sold it in 2020 for RUB 1,300,000. The son can only take advantage of a property deduction of 250 thousand rubles; he pays tax on the remaining amount (1,300,000 - 250,000) * 13% = 136,500 rubles.

Vehicle registration

The current rules for car registration have been introduced in Russia since 2015. The functions of the registrar are assigned to MGTORER. They are located in large regional settlements. Registration actions are carried out by any registration unit of the State Traffic Inspectorate of the Russian Federation, regardless of the place of residence and (or) registration at the place of residence of an individual or the place of registration and (or) location of a legal entity or its separate division. The time for which registration is carried out is determined by law - up to 3 hours. Only the period of stay of the applicant in the registrar's premises is taken into account.

The package of documents for a donation agreement (and all others) for registering the transfer of ownership of a car is as follows:

• applicant's passport;
• statement;
• car passport;
• deed of gift (download sample);
• receipt;
• insurance policy.

If there is a family connection, then documents confirming its existence are presented. The law allows registration of ownership of a car by power of attorney. The power of attorney must be executed in such a number of copies that one can be left with the registrar. The power of attorney is signed by the principal himself. Notarized power of attorney is allowed.

The cost of registering changes in the car's passport will be 350 rubles. Issuance of a new certificate – 500 rubles. Total registration costs – 850 rubles.

Options for canceling deed of gift

A donation agreement for a car can be canceled in court or pre-trial. The pre-trial scenario is allowed until the transfer of ownership is formalized - until the car is registered. For this, the desire of any of the parties to the transaction is sufficient. After entering the registration data, cancellation of the deed of gift is possible only in court.

The plaintiff may be the donor or a third party. In order for a third party to obtain enforceable rights, it is necessary that the gift agreement violates the rights of the third party. Often, the role of third parties is the relatives of the donor: a spouse or heirs who, as a result of the registration of a gift, have lost the right to property: part or all of the car.

To cancel the deed of gift, there must be grounds. If the plaintiff is the donor, then the reasons for going to court may be:

1. Any form of coercion to carry out a gratuitous transaction.
2. Misrepresentation, obtaining consent by exchange.
3. Causing harm to the donor or his relatives (close) by the recipient of the gift.
4. Violation of the procedural order of the transaction.
5. Incapacity of the donor/recipient.
6. The grounds prescribed by the provisions of the deed of gift.

In judicial practice, the most common use as a basis for action is recognition of the donor as an incompetent person. In this case, the guardians or heirs of the incapacitated donor have the right to file a claim. Heirs who will not benefit from the cancellation of the deed of gift, that is, those who will not be called to inherit, cannot file a claim.

Less common are cases of challenging a deed of gift due to the sham of the transaction. Examples of such options are situations when the donor makes a transaction not out of a desire to give a car, but in order to hide property from the creditor. Such gratuitous transactions are disputed by creditors if evidence of dishonest actions of the donor-debtor is revealed.

How to issue a deed of gift for a car - what is needed for this?

In the event of any legal problems, an officially executed deed of gift will be the only confirmation of the mutual will of the donor and the donee in court. Before drawing up a contract, you should make sure how functional the car is, and whether there are any debts or unpaid loan obligations behind it. If, as a result of the use of the car by the new owner, such negative facts emerge, then all responsibility will pass to the donor. If the donor and recipient are not direct relatives, then you will have to pay a tax on the car, amounting to 13 percent of its value.

We recommend reading: how to sell an expensive car

When should you give?

Analyzing the principles of drawing up a deed of gift for cars in Russia, it can be determined that the gift is most beneficial to the recipient of the gift if he is a close relative of the donor. Also, receiving property as a gift, and not by inheritance, makes the recipient the owner almost immediately after the transaction is completed - after registering the transfer of ownership of the car. When inheriting, you must wait until the death of the testator and the rebirth of the inheritance case (from 6 months).

Cancellation of a deed of gift is a complex procedure with a limited list of grounds. It is easier to challenge a purchase and sale transaction. And the will of the testator before his death can be changed without any restrictions at all. The simplicity of paperwork is another argument in favor of donation. It is enough to draw up an agreement in simple written form and register changes in the vehicle documentation. The disadvantage of donation is that the donor does not receive compensation in any form other than moral. It is also impossible to change your mind and return the car after registration.

Makarova Natalya Nikolaevna

Lawyer at the Legal Defense Board. He specializes in administrative and civil cases, compensation for damages from insurance companies, consumer protection, as well as cases related to the illegal demolition of shells and garages.

Gift deed for a car: procedure and cost of registration

i.e. under bail or arrest. In the event that the pledgee has no objections, it is not prohibited to give away a car encumbered with a pledge or seizure. The procedure for transferring and receiving a car Oral - handing over documents and keys to the new owner. To confirm the transaction, witness testimony or video recording of the process will be required. Written – signing by the parties of the relevant agreement. It is recommended to formalize the deed of gift in writing.

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