VS: Transactions between close relatives cannot always be considered as abuse in bankruptcy proceedings

• 3.7.2017
• 56590

The vast majority of real estate transactions are carried out for a very obvious reason - one person has an object that he intends to get rid of, and the second person just needs this object. There is a sale or exchange taking place. All clear. When relatives make a deal, an abyss of motives and undercurrents can be hidden behind its façade. The METRTV.ru portal has counted 8 main reasons that encourage relatives to transfer apartments to each other.

According to Art. 14 of the Family Code of the Russian Federation, close relatives are relatives in a direct ascending and descending line: spouses, children and parents, grandparents and grandchildren, as well as full and half brothers and sisters (who have a common father or mother). Close relatives can give, buy, sell, rent housing, pass it on by inheritance, and enter into rental and other agreements. However, some transactions between close relatives are subject to a legislative veto, while others should not be made for other reasons. Therefore, we will consider possible transaction schemes for each case.

Transfer of an object to an heir from the testator

The owner can transfer an apartment or other real estate to a chosen heir through a will, donation, purchase and sale, or through a rental agreement. Previously, the METRTV.ru portal spoke in detail about the inheritance of real estate by law and by will, as well as about the deed of gift in favor of the heir. Transferring property to an heir through purchase and sale has its own characteristics.

Natalia Mikhailyukova

lawyer of the Russian Guild of Realtors

Often transactions are made between relatives that have no legal consequences. This, for example, is a purchase and sale in which there was no transfer of money. Such a deal is easy to challenge. If there is a real sale between relatives, then it is necessary to ensure that the transfer of money is recorded. Ideally, the money is transferred to the seller’s bank account. If the payment is made in cash, then the seller should deposit the entire amount into his personal account directly on the day the contract is concluded. Subsequently, this will make it possible to prove that the transaction was not a sham. Or another situation from life. The grandmother gave the apartment to her grandson through a gift agreement, but they agreed that the grandson would provide care for an elderly relative. That is, in fact, it was not a donation, but a rent agreement. Because of this, relatives were able to challenge the deal.

However, as lawyers note, a transaction carried out without a hitch - in full compliance with the law - can be challenged.

Yulia Balay

director of the office of the Academy of Sciences "Novosel"

Interested parties may try to challenge the sale of the apartment. For example, if a grandmother sold an apartment to her grandson, and other heirs found out about this only after her death, they will almost certainly try to cancel the deal. If at the time of signing the contract the seller was over 70 years old, then the chance of challenging it is high. If someone buys an apartment from the owner who received it from an elderly relative, I advise the buyer to take notarized statements from the other heirs of the former owner that they know who the owner of the property is and have no claims.

Separately, it is worth considering the situation when the heir (in whose favor the housing is alienated) is married. If he receives an object from his grandmother/grandfather as an inheritance or by deed of gift, he will become its sole owner, but if through purchase and sale, then the apartment will be in the joint ownership of the spouses. In case of divorce, the heir will give half of the apartment to his wife.

Ivan Volkov

Managing Partner of LLC "Legal"

The apartment can be transferred to the chosen heir through donation or sale, but, in my opinion, in many situations it is more convenient to use a rental agreement. In case of any problems, returning an apartment transferred under rent is easier than under a purchase and sale agreement. Figuratively speaking, in terms of the quality of protection of the parties, annuity is in first place, and donation is in second place. The donor may demand cancellation of the gift agreement if his life circumstances have changed. There was a case in Verkhnyaya Pyshma: a person who gave an apartment to a relative lost his second home, and then the gift agreement was canceled. In third place is buying and selling.

Deal to fulfill the requirements of the guardianship authorities

In general, purchase and sale transactions between relatives do not differ from similar transactions between strangers. Differences appear if a child is a party to the transaction. According to Art. 37 of the Civil Code of the Russian Federation prohibits paid transactions (purchase and sale) between minors and their legal representatives - parents, adoptive parents, guardians, trustees, as well as their spouses and close relatives. In addition, there is a ban on donating property belonging to a minor. Previously, the portal METRTV.ru talked about controversial situations when obtaining permission for a transaction from the guardianship authorities, but life keeps throwing up new stories.

Lyudmila Plotnikova

lawyer of the Ural Chamber of Real Estate

There was a case - the spouses were getting divorced and agreed on the division of property. In particular, they decided that their apartment would completely go to their spouse. But there was a child’s share in the apartment. According to the law, my father could not buy it or receive it as a gift. To achieve their plans, they had to sell the child’s share to a third party, and from him the share was transferred to the parent.

Another difficult, although common, situation is when a grandmother sells her share of an apartment. The second owner of the apartment is a child. There have been cases when guardianship authorities prohibited the purchase of this share in favor of the child, citing the legislative prohibition of paid transactions between relatives and minors. But now, guardianship, as a rule, agrees to such deals.

Ivan Volkov

Managing Partner of LLC "Legal"

The child co-owner of the apartment has a pre-emptive right to buy out the share being sold. A minor can participate in a transaction, but a legal representative, for example, a parent, acts on his behalf. He also has a pre-emptive right to purchase a share, but must buy at a price no lower than if the sale were made to a third party.

By the way, lawyers tell a rather funny case when they managed to circumvent the ban of the guardianship authorities. The share in the apartment was sold by the grandmother on the child’s mother’s side. His mother (the seller’s daughter) wanted to purchase a share for the child. The guardianship did not approve the deal. Then the lawyer suggested rewriting the contract so that the father (not a close relative of the seller) would act as the minor’s representative. The guardianship did not protest against the deal in this form.

Close relatives are relatives in a direct ascending and descending line - children and parents, grandparents and grandchildren, as well as full and half brothers and sisters. Transactions between close relatives can be carried out according to general rules and must comply with the provisions of the Civil Code of the Russian Federation.

Purchase and sale is one of the most common types of transactions. Today, the number of transactions between relatives in which they sell property to each other has increased. We pay special attention to the fact that if a purchase and sale transaction was completed fictitiously, without a real transfer of money (for example, only for the purpose of obtaining a tax deduction), then such a transaction may be recognized as imaginary. An imaginary transaction, that is, a transaction made only for show, without the intention of creating corresponding legal consequences, is void. Therefore, it is necessary to comply with all the conditions of the legality of the transaction, in particular, to provide evidence of settlement between the parties. Violation of these rules entails the invalidity of the transaction. The sale by one of the spouses to the other of jointly owned real estate does not comply with the law. In this case, no legal consequences, namely the alienation of property and the transfer of ownership rights to another person, do not occur, since the property from joint ownership “enters” into the joint ownership of the same persons. Consequently, such a transaction for the “disposition” of jointly acquired property can be characterized as imaginary, carried out only for show, which means that such agreements are not subject to state registration on the grounds that their content does not comply with the requirements of the law. If the transfer of property into the ownership of one of the spouses is necessary, then the solution in this situation may be the conclusion of a marriage contract, which will determine the ownership of the property, or the conclusion of an agreement on the division of common property and the determination of the shares belonging to each of the spouses separately. The agreement on the division of common property and the marriage contract must be notarized. After which the spouse can independently dispose of his share in the right. Another common transaction between relatives is donation. A gift agreement can be concluded with any relative – both close and distant. When making a gift, the donee receives the property as personal property. It is not subject to division as marital property, even if the donee is married. Income received as a gift is exempt from taxation if the donor and recipient are family members and (or) close relatives in accordance with the RF IC. Let us dwell on the features of transactions involving minors. Russian legislation establishes prohibitions on certain transactions. So in accordance with Art. 37 of the Civil Code of the Russian Federation, paid transactions between minors and their legal representatives - parents, adoptive parents, guardians, trustees, as well as their spouses and close relatives are prohibited. According to this norm, for example, it is impossible to sell real estate belonging to a minor citizen, for whom his mother acts, to the mother’s parents or other close relatives. Transactions related to the disposal of real estate under the terms of trust management or guardianship, as well as transactions for the sale of real estate owned by a minor citizen or a citizen recognized as having limited legal capacity, are subject to notarization. The specifics of issuing a power of attorney should be considered. Often, to carry out transactions, powers of attorney are issued in the name of close relatives. It must be remembered that a representative cannot make transactions on behalf of the person represented in relation to himself personally (Article 182 of the Civil Code of the Russian Federation), that is, one cannot be a representative by power of attorney on both the side of the seller and the side of the buyer. So, for example, if a son has given a power of attorney to his father, then the father cannot sell the son’s property to his wife by concluding a purchase and sale agreement, since in this case the property becomes the common joint property of the spouses. Consequently, relatives can choose any type of transaction that suits a specific situation; everything is decided individually. The main condition is the open expression of the will of the parties and compliance with all the necessary requirements of the current legislation.

Interrelative exchange or purchase

Another point to remember is that when buying and selling between related parties, the buyer does not receive the right to a tax deduction. Spouses, parents (including adoptive parents), children (including adopted children), full and half-siblings, guardians and wards are considered interdependent persons. If a transaction occurs between persons with other degrees of kinship, then the right to deduction arises, but only if the transaction was not feigned and the buyer actually paid for the apartment. If an interested party (for example, the tax office) proves in court that the transaction took place without transfer of money, it will be declared void.

Natalia Devkina

Executive Director of Zyryanova Real Estate Bureau LLC

Compensatory transactions between relatives often come under the increased attention of tax authorities, and cases of challenge from other persons are not uncommon. Therefore, if we are talking about interrelated exchange or redistribution of property, then the best option is donation. In addition, real estate received as a gift from relatives is not subject to income tax.

As lawyer Lyudmila Plotnikova notes, Interrelated housing exchanges are formalized mainly through an exchange agreement.

Donating an apartment to a close relative in 2021

In order to document the transfer of the apartment, the parties draw up and sign the Transfer and Acceptance Certificate. The deed of acceptance and transfer is drawn up in any written form and must necessarily comply with the provisions of the donation agreement.

The act indicates the name of the object, its main characteristics, equipment, shortcomings, and attached documents.

From the moment the parties sign such an act, the donor’s obligation is considered fulfilled, unless otherwise provided.

The deed of gift for real estate comes into force from the date of state registration in the Unified State Register of Rights to Real Estate and Transactions with It. The gift agreement does not limit the rights of the new owner. He can dispose of the property received as a gift independently at his own discretion - sell it, transfer it to another person. If the transaction is executed in compliance with the law, the donor, after state registration of the transfer of rights, has no right to the donated property.

My parents want to give me an apartment. The apartment is registered in the father's name. Is my mother's consent required for donation?

If the apartment was purchased by the parents during marriage, the mother’s consent is required. Consent to donate an apartment must be certified by a notary.

The young man gave me an apartment. Do I have to pay tax?

If you are not a family member or a close relative of the young man, you will be required to submit a declaration to the tax office and pay 13% personal income tax.

Is it necessary to draw up a transfer and acceptance certificate when donating an apartment?

Drawing up a deed of transfer is not mandatory, but is used to confirm the fact of transfer of the gift by the donor and acceptance of it by the donee.

Is it possible to donate an apartment by proxy?

You can complete a donation transaction with the involvement of a representative. To do this, it is enough to issue a one-time power of attorney granting certain powers. The power of attorney must be notarized.

A donation is a gratuitous transaction made with the mutual consent of the parties. Certification of the donation agreement by a notary is mandatory in the following cases: when donating a share of an apartment where there are several owners; when alienating the property of a minor. You can draw up a gift agreement yourself, with a lawyer or a notary. For state registration of property rights, the state duty is paid by the donee. If the donee is not a member of the donor’s family or a close relative, he is obliged to provide a declaration and pay personal income tax in the amount of 13%.

To avoid unpleasant consequences, it is important to correctly draw up a gift agreement. Drawing up a contract with errors can lead to the cancellation of the transaction and its recognition as illegal.

Consult with experienced lawyers now. Fill out the application form below or write to the duty consultant on the website. Our lawyers will contact you at a time convenient for you and provide assistance and support completely free of charge.

DD is subject to notarization in several cases:

• a separate room in the apartment is given;
• a share of real estate where there are several owners is transferred as a gift;
• the donor is a minor or person with limited legal capacity.

It is important to consider that when donating shares by all owners in one transaction, you do not need to contact a notary - it is enough to conclude one agreement. Notarization is required if the share is donated by one of the owners.

Use maternity capital

The main problems for families entitled to maternity capital arise due to inconsistency in the actions of government bodies.

Evgenia Svintarzhitskaya

lawyer at BK-Real Estate LLC

It is a fairly common practice when maternity capital is used to buy an apartment from a relative. Most often - at the grandmother's. The pension fund does not object to such transactions. But the notary and Rosreestr sometimes refuse to formalize such an agreement. Art. referenced. 37 of the Civil Code of the Russian Federation, which prohibits paid transactions between relatives and children. Although in this case the remuneration of the transaction is a big question. After all, the child does not pay anything; money from the budget goes into payment. However, if there is opposition from the notary and Rosreestr, then they do this - the mother of the minor purchases the housing, and after registering it as the property, gives the child a share in the property. I note that such a two-part scheme costs the mother about 15 thousand more. Because before purchasing, you need to certify with a notary the obligation to allocate a share to the child, and then make the allocation.

Many experts directly say that it is better not to use maternity capital in intra-family transactions. For example, lawyer Lyudmila Plotnikova cited a case from practice. They were not allowed to buy a share in a relative’s apartment with maternity capital, so it (the share) was sold to a third party and only then he sold it to the family, who had the right to maternity capital. The agreement under which a third party bought a share in the apartment immediately stated that he was obliged to sell this property to the specified family.

Natalia Devkina

Executive Director of Zyryanova Real Estate Bureau LLC

Almost all transactions between relatives in which maternity capital is used turn out to be problematic. Usually, if you plan to use these funds, then we look for an object on the market. It happens that the transaction takes place in two stages: the parent buys the property and, within six months, registers shares in the name of family members, but it happens that the purchase and sale agreement immediately states that the property is being purchased as shared ownership.

There are situations when you have to use your ingenuity to fulfill the requirements of the Pension Fund (it is the one that transfers the funds of the mother capital) and purchase the selected object.

Natalia Mikhailyukova

lawyer of the Russian Guild of Realtors

A family entitled to maternal capital intended to buy out a share in a private house from their relative. A house for two owners, that is, half a house (three rooms) is a separate property. This half has four relatives who are co-owners, all of whom have equal shares. The pension fund did not approve the purchase of one of the shares for maternal capital. Then the contract was reissued - it set out the procedure for using the residential building, in addition, an agreement was concluded on the procedure for using the housing, which stated that the family buying the share received a separate isolated room for use. The Pension Fund was happy with this. Maternity capital funds have been allocated.

How to correctly draw up an apartment donation agreement?

Thus, a deed of gift can be drawn up taking into account the conditions and wishes of the donor and the donee. Of course, it is impossible for an ordinary citizen to know all the details. Therefore, if you plan to become a participant in such a transaction, it is better to consult with a legal specialist. On the portal, such assistance is provided free of charge.

By the way, you can arrange the deal yourself. Based on current laws, a gift to a relative in 2021 does not need to be endorsed by a notary.

For example, if a father gives an apartment to his daughter, then he is not subject to tax on such a gift. But personal income tax and tax on a gift to a nephew from his uncle are paid in full. That is, here you need to be able to distinguish the degree of relationship between close relatives.

When registering personal income tax and property gift tax in 2021, as in other years, without violating deadlines, money can be deposited in any bank. The law establishes what procedure must be followed in case of delay in payment in this direction.

The violator will have to pay 1000 rubles + 5% for each month of delay in payment of gift tax and personal income tax when registering property. For failure to pay this amount this year, a fine of at least 20% of the personal income tax established by the code will be imposed.

If this violation occurs again, this amount must be multiplied by two.

When donating an apartment, the owner of the property changes free of charge, and the donor receives nothing in return. If the contract states otherwise and the donor receives any compensation for the donated apartment, the document may be considered invalid.

And first of all, it can be challenged in court by the donor’s relatives and friends, who claim in the future to inherit this living space. Before you begin the process of registering property as a gift, you should calculate all the costs of this procedure and find out whether the gift of real estate between relatives and other persons is taxable.

Russian legislation regulates the taxation process, including the tax on the gift of an apartment between relatives. In 2021, when going through the procedure of donating property as a gift, first of all, you should be guided by the current legislation.

The obligation to pay, as well as the amount, depends on the parameters of the transaction and the participants in the process.

When drawing up a deed of gift to persons who are not relatives of the donor, unpleasant moments may arise due to the dissatisfaction of persons closer to the donor who are related to him. Since the basis for registering a deed of gift is the good will of the donor, the owner of the property, the reasons for transferring property as a gift to an outsider can be completely different, however, from the point of view of legislation, this option is quite legitimate.

However, due to the fact that a stranger who has no family ties with the owner of the apartment receives additional income in the form of real estate registered in his name, the law determines a uniform tax rate of 13% for everyone.

An agreement between close and distant relatives, which provides for the donation of residential and non-residential premises, is one of the most common transactions in 2021 and other years. That is, for civilians it is important to correctly comply with the tax law, which establishes what gift tax must be paid.

Today, the tax on donated residential and non-residential premises for individuals is 13% of the value of the property on the real estate market. The price is confirmed in the BTI at the time when the agreement was signed between non-close relatives. The law establishes that gift tax is imposed on the donee.

It is important to know! This year, the tax on gifted property for stateless persons is paid at least 30% of the price of residential or non-residential premises at the time of signing the gift agreement.

The recipient is required to submit an income report to the tax office by April 30 of the following year, after the donor and family members have signed an agreement among themselves. Payments must be made by July 15th.

The law specifies a fine for persons who violate this law. In order to pay the tax fee, you need to come to the Federal Tax Service to present a civil passport, an agreement between relatives and a document confirming the transfer of ownership of property.

It is important to know! To ensure that the real estate gift tax is not withdrawn, close relatives need to document to the Federal Tax Service the fact that there is a relationship between them. You should find out which document you should bring from the tax office.

Avoid problems with the division of marital property

According to the law, property acquired by spouses during marriage is jointly acquired. If the husband is formally the owner of such an apartment, he cannot sell the apartment to his wife, since she is already a co-owner by default.

Ivan Volkov

Managing Partner of LLC "Legal"

The owner can carry out transactions with jointly acquired property with the consent of the spouse. That is, for example, he can donate property. Including giving it to your wife herself. Then he ceases to be a co-owner. Formally, such a transaction must also obtain permission from the spouse. That is, she must allow the apartment to be donated to her. However, I have not heard of such actions being carried out in practice. Usually, if there is a desire to redistribute property, a marriage contract or an agreement on the division of common property is concluded between a husband and wife. After concluding such an agreement, an application is submitted to Rosreestr, and property rights are officially secured.

The METRTV.ru portal previously spoke in detail about the difference between a marriage contract and an agreement on the division of property. The main difference is that the marriage contract may indicate the general principles of division of property, while the agreement must indicate specific objects and, on the basis of the agreement, the transfer of ownership rights to houses, apartments or their shares is registered.

Natalia Mikhailyukova

lawyer of the Russian Guild of Realtors

I know a married couple. They purchased several properties on credit. After repaying the loan for each property, they enter into an agreement on the division of property in relation to this property. Then to the next one and so on. If property issues are settled, then even after a divorce people have normal relationships. Let me also remind you that the agreement on the division of property has been notarized since 2016. This costs 0.5% of the cost of the object, but not more than 20 thousand rubles. The cost of notarization of a marriage contract is usually in the range of 5.5 - 15 thousand rubles.

How to correctly draw up an apartment donation agreement

A deed of gift can be issued in several ways:

1. At a notary when donating a share of an apartment where there are several owners; when alienating the property of a minor. If the property is donated entirely by an adult owner, notarization is not required. The costs of registration are distributed by the parties independently by agreement.
2. Independently by downloading and filling out the current form for 2019-2020. donation agreement form. Expenses will be reduced to a minimum: expenses are borne only by the donee when re-registering rights.
3. From a lawyer. The cost of services in law firms is significantly lower than that of a notary, but the likelihood of competent drafting of a DD is higher.

Briefly: if the contract does not require notarization, you can draw it up yourself or with the help of lawyers. An alternative option for saving is registration at a law firm with subsequent certification by a notary if a share in real estate is donated.

The transaction consists of several stages:

1. Drawing up a DD yourself, with lawyers or through a notary. In the latter case, you can immediately pay for the service of transferring rights, and the notary will independently submit all the documents to Rosreestr. The re-registration period will be reduced to three working days.
2. Payment of state duty for re-registration of property rights. It can be paid directly at the MFC using the Sberbank terminal.
3. Submission of documents for registration of re-registration of rights at the MFC. It is better to make an appointment in advance using the pre-registration form on the website. The donor and recipient need to come to the MFC.
4. An alternative option is to pay online. There is no need to provide a receipt - MFC employees do not have the right to demand it; they receive information about the payment themselves from the system. But it is still recommended to save it: by presenting a receipt, you will quickly prove the fact of payment and avoid additional waste of time.
5. Obtaining an extract from the Unified State Register of Real Estate, where the new owner will be indicated. To do this, the donee comes alone; the donor’s presence is optional.

Registering a DD through the MFC takes about 10 days, but often it takes less time. The result of the application can be tracked on the official website of Rosreestr using the electronic service.

When drawing up a DD you will need:

• passports of both parties;
• extract from the Unified State Register or certificate of ownership;
• registration certificate if the apartment is privatized but not registered in the cadastral register.

Having concluded a DD, the parties must submit to the MFC:

• the contract itself;
• passports;
• real estate documents;
• written permission from the guardianship authorities if the donor is a person with limited legal capacity or a child;
• notarized consent of the donor's spouse;
• receipt for transfer of state duty.

An application for re-registration of rights is prepared by an MFC employee independently; the parties only need to sign it.

The agreement is drawn up in three copies: one remains with the donor, the second with the donee, and the third with the MFC or with a notary, depending on where the registration takes place.

The form of the DD is not established by law, but it must contain comprehensive data:

• Full name, series and numbers of passports, registration addresses of the donee and donor;
• information about the apartment: area, number of rooms, address, floor;
• rights and obligations: the donor undertakes to transfer the property to the donee, and the donee – to accept it;
• the procedure and terms for transferring the apartment to the donee;
• liability for non-fulfillment or improper fulfillment of the terms of the DD. For example, when abandoning real estate, the donee undertakes to compensate the donor for damage caused by such abandonment;
• signatures of the parties, date of registration;
• conditions for changing the DD.

Hide property from creditors

Donating or fictitiously selling an apartment to a relative is a fairly common practice. In this way, borrowers (entrepreneurs or ordinary citizens) try to hide property from creditors. If housing is transferred to one of the spouses (who is not being pursued by creditors), then, as indicated above, a marriage contract or property division agreement is used.

Ivan Volkov

Managing Partner of LLC "Legal"

If a person has incurred debts and transferred an apartment to his wife through a property division agreement, creditors may try to prove that there was an abuse of right in this case and challenge the transfer. After which they will be able to foreclose on the apartment.

Donation or sale is also used to move housing away from the demands of creditors. The donee (buyer) can be not only the spouse, but also another relative.

Yulia Balay

director of the office of the Academy of Sciences "Novosel"

If a pre-bankrupt businessman transfers property to relatives through donation or sale, then all such transactions completed within three years before bankruptcy will be carefully scrutinized and may be challenged. However, even if the apartment was sold during this period, but at the market price and real money was received for it, then it is almost impossible to challenge such a transaction. Or, if, for example, all the property is registered in the name of the spouse and she has sufficient income to buy it all, then it is also unlikely to be able to challenge such a division of property.

Transfer the apartment to a relative so that he can take out a loan

If your brother/grandson/son-in-law intends to start a business, then why not give him an apartment, against which he can borrow money. Of course, a relative (the former owner of the apartment) must be prepared for the fact that if a novice businessman goes bankrupt, the collateral apartment will go to the creditor.

Ivan Volkov

Managing Partner of LLC "Legal"

A rather sensational case that we are currently dealing with is that of a mother with many children, Irina Komova. Her mother transferred an apartment to Irina’s ex-husband under a purchase and sale agreement at a price reduced several times, but did not receive any money for it. It was assumed that he would take out a loan to buy a home for himself, since after the divorce he was left without a roof over his head. A man invested money in a business instead of housing, went broke, and now the woman and three children are being kicked out of the apartment by debt collectors.