»Ê¹ÚÌåÓýapp

A DMC is a gift of property made by a donor in contemplation of their death within the near future. 

• »Ê¹ÚÌåÓýapp normal rules about incomplete gifts do not apply - the property can be said to be on trust for the transferee until the occasion of the death, when the gift becomes effective and absolute. 
• A DMC is in effect an incomplete gift for Inheritance Tax purposes in that the property gifted remains part of the estate at death.

If you receive a claim that a gift is a DMC, obtain all the necessary facts and refer to Technical Group (TG) for advice.

»Ê¹ÚÌåÓýapp requirements for a DMC, as laid out in the case of Sen v Headley (1991) and other case law, are

»Ê¹ÚÌåÓýapp property must be capable of passing by donatio

In general, anything capable of transfer by mere delivery may be the subject matter of a DMC.  Land, bonds and insurance policies can be possible subject matter, but building society shares cannot (Re Weston 1902)

»Ê¹ÚÌåÓýapp gift must be made in contemplation of impending death

»Ê¹ÚÌåÓýapp donor must have contemplated their death at the time of the gift.  This is a subjective test and must be decided from the facts.

»Ê¹ÚÌåÓýapp gift must be conditional on the donor’s death

»Ê¹ÚÌåÓýapp gift must be completed only on the death, being revocable in the lifetime. It is ineffective if the donor does not die.

Delivery is essential

Delivery is effected by delivery of the actual property and must be made to the donee, or someone on their behalf.  »Ê¹ÚÌåÓýapp donor must part with control and not merely physical possession of the property.

In Sen v Headley it was held that a delivery of title deeds (kept in a steel box, the key to which had been given by X to Y during her visits to the hospital during X’s illness) amounted to X’s parting with control over the house.

In Woodward v Woodward (1992), A’s terminally ill father, B, told A to keep the keys to B’s car, which A used regularly.  It was held that there had been effective delivery.

Scotland

In Scots law there are three essentials for a DMC

• »Ê¹ÚÌåÓýapp donor must act in contemplation of his death,
• »Ê¹ÚÌåÓýapp subject of the donation must be delivered to the donee, and
• »Ê¹ÚÌåÓýapp donor must manifest his intimation to make in favour of the donee a de praesenti gift consistent with the double resolutive condition stated above.

»Ê¹ÚÌåÓýappre is as in the case of donation inter vivos a presumption against donation which has to be overcome. See the Stair Memorial Encyclopaedia Vol 8 para 607.

A DMC basically performs the same function as a legacy.  Both are revocable in the granter’s lifetime, both are postponed to the claims of the deceased’s creditors if the funds of the deceased are insufficient to meet his debts in full; neither affects the claims of a surviving spouse or civil partner (IHTM11032) to jus relictae or of the children to legitim and the property gifted of course remains an asset of the estate for Inheritance Tax purposes at death.

Any claim that a gift is a DMC in Scotland should be referred to TG.

»Ê¹ÚÌåÓýapp Succession (Scotland) Act 2016 came into effect on 1 November 2016. »Ê¹ÚÌåÓýapp new legislation has abolished the mortis causa rule. A gift in contemplation of death is now regarded as a straight lifetime gift unless it is expressed otherwise.