A time for gifts?

28 Aug 2015

If you are considering making a gift of chattels; such as jewellery, paintings, furniture, it is important that you follow the correct process to ensure that the gift is effective. There are two important aspects to making a gift; firstly, the intention to make a gift and secondly, the delivery of the gift.

Generally, gifts of chattels are made by "delivery" rather than by using a deed. A gift will be delivered when it is handed over to the recipient. If there is no actual delivery, for example if the painting remains in your house, the act must be such, or be accompanied by such words as to be clearly a gift.

However, while delivery is not necessarily essential, it is important in relation to the calculation of inheritance tax. If you gift jewellery to your child but you do not give it to them and continue to use it, then the jewellery will remain a part of your estate. It may be possible to avoid this issue by paying for retaining the benefit of the jewellery.

A recent case has highlighted the importance of delivery, and the different forms this can take when making a gift.

Retention of benefit? 

Two brothers were appointed as executors of their mother's estate. They disagreed over whether inheritance tax was due on paintings that had been given to them by their mother and their aunt.

One brother argued that their mother had given them some paintings in 1985, over 20 years before her death. On the advice of a family friend, who was a solicitor, the paintings were taken off the wall, handed to the sons and then rehung in the family home, where the sons were living, on their direction. The sons would later move out but they never lived somewhere permanent or secure and so the paintings remained in the family home for safekeeping. No deed of gift was made.

Their aunt had also expressed an intention to give some paintings to them but they remained in her home until she moved into a care home. The paintings were then sent to their parents' home were they were kept on behalf of the brothers and the court decided that the gift was made at the later time.

The court confirmed that there had to be intention and delivery. Previous case law required evidence of physical transfer; the husband telling his wife "It's all yours" while she (not he) touched the furniture was insufficient to constitute delivery.

The court ultimately decided that there had been a change in the quality and purpose of the brothers parents’ possession of the paintings. Their parents now held the paintings on their behalf and this was sufficient to constitute delivery.

The importance of intention 

This case provides further insight into the requirement of delivery. Dylan Thomas had been commissioned by the BBC to write Under Milk Wood. Thomas gave the original manuscript to Douglas Cleverdon, a BBC producer whom he had been working with on the project for many years, to prepare copies. The original was returned to Thomas but he lost it. Thomas was travelling to America to give readings from the text and so Cleverdon brought copies to the airport. On delivering the copies, Thomas told him the names of the bars where he may have left the manuscript and said that if Cleverdon could find it then he could keep it. Cleverdon found the manuscript a few days later in one of the places that Thomas had told him. Thomas died a few weeks later in America.

The onus was on Cleverdon to prove that Thomas had made a gift of the manuscript. The two things that they needed to prove were the intention to make the gift and then the delivery of the gift. After consideration of the evidence, the judge accepted Cleverdon's version of events and agreed that Thomas had intended to make a gift.

The remaining issue was whether there had been delivery. Thomas was not in possession of the manuscript at the time the gift was made and there was a possibility that it would never be found. The judge deemed that because Cleverdon had obtained the manuscript from the pub where Thomas had left it and did so with Thomas' consent, this was sufficient to constitute delivery.

However, it is not clear if the fact that Dylan listed a number of pubs where the manuscript could be found, or how quickly Cleverdon took to find it made a difference.      


These cases show the importance of documenting gifts and the difficulties that may arise when delivery does not take place in the normal manner. Ideally, when making a gift, it should be clear that the chattel has passed to the recipient by removing it from the original owner's premises or possession.

Additional information