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What are the implications of both methods?

A IT IS important to inquire into A's goal.

Assuming that it is to ensure that, upon her death, B becomes the owner of the condominium unit, then the least inexpensive way of doing this would be to give the unit to B through her will.

Upon A's death and after payment of estate duty, for which none will be payable if A's only asset is this condominium unit and its value is less than $9 million, the executor of A's will would follow the direction given in the will and transfer the unit to B.

This transfer would attract a stamp fee of only $10 and registration fees of about $65 payable to the Land Registry. However, A's will would need to be sanctioned by the courts and legal fees and other expenses of probate would have to be paid, totalling a few thousand dollars.

On the other hand, if A wants B to enjoy the benefits of ownership while A is still alive and after her death, A could make a transfer of the condominium unit such that A and B become joint tenants. Upon A's death, B as the survivor would be entitled to the unit and become the sole owner.

For A and B to become joint tenants, A could either sell the condominium unit to B on the understanding that legally both will be joint tenants, or A could make a gift, in which case, no money would change hands.

Either option would attract ad valorem stamp duty of about 3 per cent of the sale price (if it's a sale) or the market value (to be assessed by the Commissioner of Stamp Duties, if it's a gift).

There are other disadvantages of a gift of the condominium unit such as liability for estate duty and cancellation of the transfer of the unit if A were to become insolvent.

Chew Mei Choo
Partner
Shook Lin & Bok

Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to chanteik@sph.com.sg