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Lifetime Gifting · 1 August 2026

Lifetime Gifting as an Estate Planning Tool in Kenya

Transferring assets during your lifetime by Deed of Gift — what completes a gift, the tax and registration steps involved, and the risks to weigh first.

Introduction

Lifetime gifting, also known as a gift inter vivos, involves the voluntary transfer of an asset from one person to another during the owner’s lifetime.

A Deed of Gift records the donor’s intention to transfer the asset without receiving a purchase price. The transfer is commonly expressed to be made out of natural love and affection, particularly where the parties are related.

Signing a Deed of Gift does not necessarily complete the gift. The relevant transfer documents must be executed, all applicable taxes and costs addressed, the necessary consents obtained and legal ownership transferred to the recipient. Kenyan courts have consistently held that an incomplete promise to make a gift is insufficient.

Key Parties and Terms

Donor

The donor is the legal owner giving the asset. The donor must have the legal capacity and authority to transfer the property.

Donee

The donee is the person receiving the gift. The donee must accept the gift and comply with any applicable transfer and registration requirements.

Gift Property

The property being gifted may include land, shares, money, motor vehicles, business interests, intellectual property or other movable and immovable assets.

Consideration

A genuine gift does not involve payment of a purchase price. In transactions involving family members, the Deed may state that the transfer is made in consideration of natural love and affection rather than monetary consideration.

Requirements for a Valid Lifetime Gift

A valid lifetime gift generally requires:

A donor with legal capacity and proper ownership of the asset;
A clear and voluntary intention to make the gift;
Clear identification of the donee and the gifted property;
Acceptance of the gift by the donee;
Proper execution and registration of transfer documents;
Payment of applicable taxes, duties and registration costs;
Obtaining all necessary consents; and
Delivery or registration of the asset in the donee’s name during the donor’s lifetime.

For land, the transfer must be completed and registered at the relevant land registry.

Depending on the nature and status of the property, spousal consent, Land Control Board consent, lender or lessor consent, a valuation, and land-rates or land-rent clearances may also be required.

Properties administered through the ArdhiSasa platform, including properties in Nairobi and Mombasa, may first require verification and, where applicable, conversion on the platform.

Where the property is held under a long-term sublease requiring conversion under the sectional-property regime, a sectional plan must be registered and a sectional title issued before the transfer can be completed.

Taxes and Costs:

A lifetime gift is not automatically exempt from tax merely because no money is paid.

Stamp Duty

Stamp duty is ordinarily assessed using the asset’s market value rather than a purchase price. The applicable rates are generally:

4% of the market value for immovable property situated within a municipality or urban area;
2% of the market value for immovable property situated outside such areas; and
1% of the value of the shares for a transfer of shares, unless an exemption applies.

Stamp duty is ordinarily borne by the donee.

Capital Gains Tax

A gift is treated as a transfer for Capital Gains Tax purposes. Where applicable, Capital Gains Tax is charged at 15% of the net gain and is generally payable by the donor. For a gift or other non-arm’s-length transaction, the market value of the property may be used in determining the transfer value.

Certain transactions, including qualifying transfers between spouses, to immediate family members or into a Family Trust, may benefit from statutory exemptions. The availability of an exemption should be confirmed before the transfer is undertaken.

Additional costs may include valuation fees, consent fees, registration charges, professional fees and the cost of obtaining property clearances.

Advantages of Lifetime Gifting

Enables beneficiaries to receive and use assets immediately;
Allows the donor to witness the benefit created by the gift;
Removes a properly transferred asset from the donor’s future estate;
Reduces the number of assets requiring court administration after death;
May reduce uncertainty and disputes regarding the donor’s intentions; and
Allows the donor to transfer selected assets gradually as part of a wider estate plan.

Disadvantages

A completed gift is ordinarily irrevocable, and the donor loses ownership and control;
The donor may later require an asset that has already been transferred and will not have access to it;
The gifted property may become exposed to the donee’s creditors, matrimonial disputes or poor financial management;
Gifts made unequally among family members may create resentment or succession disputes;
Tax, stamp duty, valuation, consent and registration costs may be significant;
A gift may be challenged on grounds such as incapacity, fraud, undue influence or failure to complete the transfer; and
Gifting property to a minor may require a Trust or another suitable holding arrangement.