TRANSFER OF LAND BY GIFT IN GHANA

ESSENTIAL REQUIREMENTS UNDER GHANAIAN LAW

INTRODUCTION

A gift of land is a voluntary transfer of an interest or right in land without valuable consideration. It is therefore distinguishable from an ordinary sale, where the transferee provides monetary or other valuable consideration for the interest acquired.

In Ghana, the principal legislation governing the transfer of interests in land is the Land Act, 2020 (Act 1036). The Act contains a specific statutory framework for transfers of land, including the requirements relating to contracts for transfer, conveyancing, execution, registration and challenges to conveyances. The Stamp Duty Act, 2005 (Act 689) is also relevant because a gift of land may attract stamp duty, subject to statutory exemptions.

The essential requirements for a valid gift of land may be discussed under the following heads:

1. capacity and title of the donor;
2. intention to make a gift;
3. absence of valuable consideration;
4. acceptance by the donee;
5. identification of the property;
6. compliance with the statutory requirements for transfer;
7. proper execution of the conveyance;
8. freedom from fraud, duress and unconscionability;
9. stamping and payment of applicable duties; and
10. registration of the transfer.

1. THE DONOR MUST HAVE A VALID INTEREST IN THE LAND

The first requirement is that the person purporting to make the gift, known as the donor, must possess an interest or right in the land which is capable of being transferred.

The principle is straightforward: a person cannot ordinarily transfer a better title than the person possesses.

Section 32 of the Land Act, 2020 (Act 1036) provides the general statutory framework for the transfer of interests and rights in land. A holder of an interest or right in land may transfer that interest, subject to the Act and any applicable restrictions affecting the land.

Consequently, before accepting a gift of land, the donee should establish:

• the identity of the donor;
• the nature of the donor’s interest;
• the root of title;
• whether the donor has authority to dispose of the land;
• whether the land is subject to a mortgage, lease, charge, caveat or other encumbrance;
• whether there is an existing dispute over the land; and
• whether any consent is required before the transfer.

A Lands Commission search is therefore an important part of the due-diligence process.

For example, if A claims to own a parcel of land and purports to gift it to B, but the land is actually registered in C’s name, A cannot simply confer ownership on B by executing a deed of gift.

2. THERE MUST BE CLEAR INTENTION TO MAKE A GIFT

A gift requires a clear intention on the part of the donor to transfer the property without consideration.

This requirement is particularly important because a statement concerning future ownership is not necessarily an immediate gift.

Consider the following:

“I give this house to my daughter, Ama, with immediate effect.”

This indicates an intention to make a present inter vivos transfer.

Compare this with:

“When I die, this house shall belong to my daughter, Ama.”

The second statement is fundamentally testamentary in character. It purports to determine what happens to the property upon death and would ordinarily need to be considered under the law relating to wills and testamentary dispositions.

The distinction is therefore between:

Inter vivos gift: operates during the donor’s lifetime.

Testamentary disposition: takes effect upon the donor’s death.

A person who wishes to retain complete ownership until death should ordinarily consider whether a will or trust is more appropriate rather than attempting to create an immediate gift.

3. THE TRANSFER MUST BE WITHOUT VALUABLE CONSIDERATION

The defining characteristic of a gift is that the recipient does not give valuable consideration for the property. The donor voluntarily parts with the relevant interest.

Thus, where A transfers land to B in return for GH¢500,000, the transaction is not properly characterized as a pure gift merely because the parties describe it as one.

The substance of the transaction is important.

Indeed, the Stamp Duty Act, 2005 (Act 689) specifically addresses voluntary dispositions inter vivos. Section 20 provides that a conveyance or transfer operating as a voluntary disposition inter vivos is generally chargeable with stamp duty as though it were a conveyance or transfer on sale, using the value of the property in place of consideration.

Therefore, the legal practitioner should not simply rely on the label “Deed of Gift”. The actual circumstances surrounding the transaction must be examined.

4. ACCEPTANCE BY THE DONEE

The person receiving the gift is the donee.

A gift ordinarily requires acceptance by the donee. Acceptance may be express or, depending on the circumstances, inferred from conduct.

For example, where a father executes a deed transferring a house to his adult daughter and she accepts the transfer, takes possession and treats the property as hers, there is strong evidence of acceptance.

The issue can become more complicated where:

1. the donee is a minor;
2. the donee is incapacitated;
3. the gift is subject to conditions;
4. the gift is disputed by the donee; or
5. Another person purports to accept the gift on behalf of the donee.

The deed should therefore identify the donee and record the acceptance of the transfer where appropriate.

5. THE LAND MUST BE CLEARLY IDENTIFIED

A fundamental requirement of a land transaction is that the property being transferred must be sufficiently identifiable.

The deed should therefore contain a sufficiently clear description of:

• the location of the land;
• the size or dimensions;
• the plot number where applicable;
• the site plan;
• the boundaries;
• the relevant district or municipality;
• the nature of the interest being transferred; and
• the donor’s title or root of title.

The Land Act itself contemplates a description of land that allows the land to be readily identified. The statutory forms accompanying the Act require information concerning the description of the land and relevant interests.

This becomes particularly important where the donor owns a large parcel but wishes to gift only a portion.

For example, it is insufficient to state merely:

“I give my land at Accra to my son.”

A proper conveyance should make it possible to identify precisely which land has been transferred.

6. COMPLIANCE WITH SECTIONS 34 AND 35 OF THE LAND ACT

This is one of the most important aspects of the transaction.

SECTION 34 — CONTRACT FOR TRANSFER

The Land Act regulates the contractual stage of the transfer of an interest in land.

SECTION 35 — MODE OF TRANSFER

The actual transfer must comply with the statutory requirements concerning the form and execution of the conveyance.

The effect is that a land transfer should not be treated as complete merely because the donor has verbally announced that the property has been given away.

For an ordinary statutory conveyance, the transaction should be properly documented in writing and executed in accordance with the Act.

The practical consequence is that a person who wishes to gift registered land should ordinarily execute an appropriate Deed of Gift/Conveyance rather than relying upon an informal declaration.

7. THE CONVEYANCE MUST BE PROPERLY PREPARED

Section 33 of the Land Act, 2020 provides that a conveyance is to be prepared by a person qualified under the applicable legal framework.

Accordingly, a professional conveyance should properly state:

• Parties
• Donor: the person transferring the interest.
• Donee: the person receiving the interest.
• Recitals

The deed should explain:

• the donor’s title;
• the circumstances giving rise to the transfer;
• the relationship, if relevant;
• the nature of the interest being transferred.

OPERATIVE CLAUSE

The deed should contain the operative language by which the donor actually transfers the interest to the donee.

PROPERTY DESCRIPTION

The land must be adequately described, normally with reference to the relevant site plan and title documents.

CONSIDERATION

The deed should make clear that the transfer is a gift and that there is no valuable consideration, where that is genuinely the case.

EXECUTION

The deed must be executed in accordance with the statutory requirements.

8. THE DONOR MUST HAVE CAPACITY

The donor must have legal capacity to dispose of the property.

This includes considering whether the donor:

• is of full age;
• understands the transaction;
• owns the relevant interest;
• is acting voluntarily;
• has authority where acting through an attorney; and
• is subject to any legal restriction affecting the disposition.

Capacity is particularly important in cases involving elderly people, persons suffering from incapacity, persons acting under powers of attorney and persons whose decisions may have been influenced by others.

Section 38 of the Land Act contains provisions concerning parties to a conveyance and capacity.

9. THE GIFT MUST BE VOLUNTARY

A genuine gift must be made voluntarily.

This is particularly important because gifts are sometimes challenged on the basis that the donor was:

• deceived;
• threatened;
• pressured;
• unduly influenced; or
• induced to execute the document under circumstances making the transaction unconscionable.

The Land Act specifically addresses unconscionability, fraud, duress and circumstances in which a conveyance may be varied or set aside.

Therefore, the existence of a signed deed does not necessarily end the legal inquiry.

If, for example, an elderly landowner signs a deed after being threatened by a relative, the relative cannot necessarily rely upon the signature alone to establish a valid and enforceable gift.

The surrounding circumstances may be examined by the court.

10. RESTRICTIONS AFFECTING THE LAND MUST BE INVESTIGATED

A donor’s ownership does not necessarily mean that the donor can freely transfer the land without further consideration.

The practitioner should investigate whether the land is:

• mortgaged;
• charged;
• leased;
• subject to a restriction or caveat;
• family or stool land;
• subject to customary rights;
• jointly owned;
• matrimonial property;
• subject to a court order; or
• otherwise restricted from transfer.

The Land Act, 2020 contains specific provisions dealing with restrictions on the transfer of land and interests in land.

For example, where the land is matrimonial property, the 1992 Constitution applicable family/property legislation and the Land Act may become relevant depending on the circumstances.

The practitioner should therefore determine not merely “Who owns the land?”, but also “Does that person have unrestricted power to transfer it?”

11. CUSTOMARY LAND REQUIRES SPECIAL CONSIDERATION

Ghana’s land system contains substantial customary interests.

The Land Act recognizes certain customary transactions and specifically provides an exception for an oral grant under customary law.

Section 36 identifies transactions exempt from the ordinary requirements of sections 34 and 35, including specified customary transactions. Section 37 provides a mechanism for recording an oral customary transfer.

Where an oral customary transfer is recorded, the record should contain the essential features of the transaction and comply with the statutory requirements relating to execution and certification.

This is important because customary land may involve:

• stools;
• skins;
• families;
• clans;
• customary authorities;
• customary tenants; and
• other persons with recognised customary interests.

A person therefore cannot necessarily treat customary land as though it were ordinary individually owned land.

12. THE GIFT SHOULD BE STAMPED

Stamp duty is an important part of completing a land gift.

Under Section 20 of the Stamp Duty Act, 2005 (Act 689), a voluntary disposition inter vivos is generally subject to stamp duty based on the value of the property.

The Ghana Revenue Authority explains that land gifts are among the instruments subject to stamp duty and that the duty is imposed on the relevant instrument.

However, there are important exemptions.

The GRA identifies transfers by way of gifts inter vivos:

• from spouse to spouse;
• from parent to child; and
• from child to parent

among the general exemptions from stamp duties.

The Stamp Duty Act also contains provisions dealing with transfers where a beneficial interest does not pass and certain fiduciary transfers, which can become particularly relevant when comparing a gift with a trust.

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13. GIFT TAX SHOULD ALSO BE CONSIDERED

Stamp duty should not be confused with gift tax.

The GRA explains that the value of a taxable gift is generally determined by reference to its market value at the time of receipt. Where an individual receives a taxable gift outside business or employment, the GRA states that a return is to be submitted within 21 days of receiving the gift.

There are statutory exemptions. The GRA identifies gifts received under a will or intestacy and certain gifts between specified relatives, including spouses, children, parents, siblings, aunts, uncles, nephews and nieces, among exempt categories.

Therefore, when advising on a land gift, the lawyer should consider both stamp-duty consequences and income/gift-tax consequences, rather than assuming that because a transaction is a gift, it is automatically tax-free.

14. REGISTRATION AT THE LANDS COMMISSION

Execution of the deed should not be treated as the end of the transaction.

The completed instrument should be presented for registration in accordance with the Land Act, 2020 and the applicable registration procedures.

Registration is particularly important because it creates an official record of the interest and provides greater protection against subsequent competing transactions.

The practitioner should therefore ensure that the transaction proceeds through the appropriate stages, including:

Title investigation → preparation of deed → execution → stamping/assessment → registration → obtaining evidence of registration.

The Land Act consolidated the statutory framework for land registration and repealed the former Land Registry Act, 1962, among other enactments.

15. EFFECT OF A COMPLETED GIFT

Once a valid gift has been properly completed, the donor has transferred the relevant interest to the donee.

The donee then becomes entitled to the interest transferred, subject to:

• the terms of the conveyance;
• any limitations on the donor’s original interest;
• registered encumbrances;
• conditions affecting the land; and
• applicable statutory or customary restrictions.

This is one of the most important practical differences between an immediate gift and a will.If A gives land to B during A’s lifetime and completes the transfer, A cannot simply treat the land as still belonging to A merely because A later changes his or her mind.

If A wants to retain control and ownership during life but determine who receives the land after death, a will or trust structure may be more appropriate.

16. GIFT OF LAND VERSUS TESTAMENTARY GIFT

The distinction can be illustrated simply.

Gift inter vivos

A owns a house.

A executes a valid deed of gift transferring the house to B during A’s lifetime.

B receives the transferred interest during A’s lifetime.

Gift under a will

A owns the same house.

A states in a valid will:

“I devise my house at East Legon to B.”

A continues to own the property during A’s lifetime.

Upon A’s death, the testamentary disposition operates through the administration of A’s estate.

Thus, the central distinction is when the transfer takes effect.

17. PRACTICAL PROCEDURE FOR A LAND GIFT IN GHANA

A lawyer handling a proposed gift of land should ordinarily proceed systematically.

STEP 1: TAKE INSTRUCTIONS

Identify:

• donor;
• donee;
• property;
• nature of gift;
• relationship between parties;
• donor’s objective; and
• whether the donor intends an immediate or future transfer.

STEP 2: CONDUCT TITLE INVESTIGATION

Conduct the necessary searches and examine:

• title certificate;
• indenture;
• site plan;
• previous conveyances;
• lease;
• allocation documents;
• registration particulars; and
• encumbrances.

STEP 3: ESTABLISH CAPACITY AND AUTHORITY

Confirm that the donor has capacity and authority to dispose of the interest.

STEP 4: DETERMINE WHETHER CONSENT IS REQUIRED

Consider whether the transaction involves:

• customary land;
• family land;
• matrimonial property;
• mortgaged land;
• jointly owned property; or
• another restricted interest.

STEP 5: PREPARE THE DEED

Prepare the appropriate Deed of Gift/Conveyance in compliance with the Land Act.

STEP 6: EXECUTE THE DEED

Ensure proper execution by the donor and donee, where required.

STEP 7: ASSESS AND PAY APPLICABLE DUTIES

Submit the instrument for stamp-duty assessment and determine whether any exemption applies.

STEP 8: REGISTER THE TRANSFER

Submit the properly completed documentation to the Lands Commission for registration.

STEP 9: OBTAIN EVIDENCE OF REGISTRATION

The donee should retain the registered instrument/title documentation as evidence of the acquired interest.

CONCLUSION

The transfer of land by gift in Ghana is not merely a matter of the owner announcing that a particular parcel has been given to another person. A legally effective gift requires a valid transferable interest, intention to make a present gift, absence of valuable consideration, capacity, proper identification of the land, compliance with the Land Act, proper execution of the conveyance, freedom from fraud or duress, compliance with applicable tax and stamp-duty requirements, and registration where required.

The principal statutory framework is found in sections 32–39 of the Land Act, 2020 (Act 1036), supplemented particularly by the Stamp Duty Act, 2005 (Act 689) and, depending on the circumstances, Ghana’s constitutional, customary, family and tax laws.

The most important practical distinction is this:

A gift is an inter vivos disposition. Once properly completed, the donor has transferred the relevant interest during his or her lifetime. A person who wishes to retain ownership and control until death should instead consider a will or an appropriately structured trust.

This distinction becomes particularly important when advising clients who say, “I want to give my land to my children, but I still want to control it and use it until I die.” In that situation, a simple deed of gift may not achieve the client’s actual objective; the lawyer should examine whether a trust or testamentary arrangement better reflects the client’s intention.