Gifting is one of the most common legal transactions between close persons – whether it is money, movable property, a pet or other assets. Yet it is often underestimated that even gifting can have its risks, tax implications and legal pitfalls. In this article, we explain how a gift agreement works under the Civil Code, what it must contain, when a notary is needed and what the costs of drafting it can be. You will also learn about gift tax, gift on death, easement or gift in insolvency.
A donation contract is a legal act, the essence of which is the transfer of ownership rights from the donor to the donee free of charge. The Civil Code provides that a gift is valid if the donor decides to transfer something free of charge and the donee accepts the gift. The contract may be in writing, but only in certain cases is this mandatory – for example, in the case of a gift of real estate or other property requiring registration in a public register.
The gift can be a movable object, money, an animal, a share in a company or any other asset. In the case of ordinary transfers of movable property, the contract may also be created by actual delivery. However, it is still advisable to have a written document for larger or more sensitive gifts to prevent disputes, misunderstandings or problems in probate.
The gift agreement should contain several key details. For more complex cases, higher values or specific gifts (e.g. an animal, shares in a company, valuable items), a precise definition of the contents is essential.
What the gift agreement must contain:
The contract may also contain other provisions, for example, on the revocation of the gift, on the obligations of the donee or on how the gift is to be used.
Our team of lawyers can help you draw up a bespoke gift agreement – quickly, correctly and securely. You will save yourself time, worry and avoid disputes in the future. Contact us and we’ll take care of everything for you.
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Although there is often talk of a “gift tax”, the classic gift tax as a separate tax no longer exists. Since 2014, donations have been assessed under personal income tax. This means that the donee may be obliged to tax the gift, but only if the gift is not exempt from tax.
The Income Tax Act contains a fairly wide range of exemptions, so a large number of gifts do not actually have to be taxed. The most commonly exempted are:
If the gift does not fall under any of the exceptions, the donor must declare it in the tax return. The taxable amount is the normal cost of the gift, with the rate based on the normal income tax regime. For more expensive gifts, it is particularly important to have clear documentation of the value of the gift to avoid disputes with the tax authorities.
We always recommend checking the current wording of the law or consulting an expert to make a correct assessment, as tax rules can change and exceptions may apply in specific cases.
The cost may vary depending on whether you draw up the agreement yourself, use a free template or have a professional draw it up for you.
However, investing in a good quality legal document is worthwhile in most cases, especially when larger values or specific conditions are involved.
Tip: Gifting property is one form of gratuitous transfer of property that is often used between family members or partners. Donating real estate brings with it a number of issues. How to do everything legally?
A gift that is conditional on the donor surviving the donee is usually seen as a bequest (i.e. a will in which you leave something to someone).
However, it can be treated as a gift if two conditions are met:
This is without prejudice to the provisions of § 2057, which deal with other restrictions on gifts on death.
Sometimes the donor wants to ensure that he or she will be able to continue to use the donated property, typically real estate. In this case, an easement – for example, a lifetime right of use – can be inserted into the agreement. This provision must be described precisely and clearly so that there are no disputes in the future.
If the donor is insolvent or threatened with insolvency, the donation may be challenged. The insolvency practitioner may challenge certain transfers of property if creditors would be prejudiced. The issue is complex and it is certainly advisable to have a lawyer assess the situation.
An animal is not a chattel but has a special legal status under the law. Nevertheless, gift agreements for an animal are commonly used. It is important to specify the identification of the animal (chip, description, vaccination certificate) and to stipulate the obligations of the donor, especially as regards care.
The donor can revoke the donation in certain circumstances, but only in cases expressly allowed by the Civil Code. The most common situations are when:
There are rules to the gift revocation process. The donor must serve a declaration of revocation on the donee and at the same time demand the return of the gift. If the donee refuses to return the item, it is possible to seek its return through the courts. If a lawsuit is anticipated, it is advisable to have everything in writing.
The law also provides for a time limit – for example, the withdrawal of a gift for ingratitude must be made by the donor within one year from the time he or she became aware of the ingratitude. After this period, the right expires. Importantly, not every conflict or inconvenience is sufficient to successfully revoke a gift. Courts assess situations on an individual basis and require objectively compelling circumstances.
Therefore, it is always advisable to consult a lawyer in such cases, especially if the property involved is of a higher value or if there is a dispute as to whether an injustice or hardship actually occurred.
Tip: Do you donate to charities, a school in your town or even a shelter? And are you wondering how to squeeze the most out of your donations in taxes – whether you’re an employee, self-employed or a business? Find out in our article.
A deed of gift is a legal act by which a donor transfers property, whether money, chattels, animals or other property, to the donee free of charge; the deed should include identification of both parties, a precise description of the gift, a statement of the gift and acceptance, any conditions and signatures. Gifts have tax implications – although there is no separate gift tax, some gifts are subject to income tax unless exempt (e.g. between direct relatives, spouses or cohabitants). The cost of drawing up a gift agreement varies depending on whether you use a free template, a lawyer or a notary. Some situations require special arrangements, for example, an easement in the case of a gift of real estate, a gift in insolvency, or a gift agreement for an animal, where identification and care arrangements must be made. A gift can be revoked under statutory circumstances, in particular for ingratitude or if the donor is in need, but only under strict conditions and within statutory time limits. In all more complex cases, where the value of the gift is higher or a dispute is imminent, it is advisable to have the contract drawn up by a professional.
There is no separate gift tax. Donations are dealt with under income tax, but most gifts between relatives tend to be exempt.
Only if you want a notarial deed or if it is a more complex legal transaction. This is not mandatory for ordinary gifts.
The price ranges from a few thousand depending on the complexity. There are also free designs, but they may not always be suitable.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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