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Amor (Worker)     31 December 2010

Family Settlement deed

mother(has 3 sons)acquired property(land) via will. Her sistesr have disputed it which now is litigation in court.

Now, we have decided to do a settlement deed and sell it. My question related to using Family settlement deed to settle the dispute and also create ownership for sons to take the capital gain tax exemption arising from it.

1)Can the settlement deed  be made where mother's sister acknowledge the will and also relinquish there right but in favour of  my mother and her 3 sons, as we are going pay the sister some money towards the settlement.?

Hope it makes sense. As doing it this way will make my mother's title clear and also 3 son will have right in the property for claiming captial gain tax exemption under section 54.

Please let me know if this can be done. If yes what exact things need to be looked at. If not why? are there any alternative ways it can be done.



 2 Replies

VIJAY MONGA (ADVOCATE)     31 December 2010

If your mother's sister surrenders her right title and interest in property in question or acknowledges the Will in dispute then your mother becomes the absolute owner but all three sons have no right title and interest in the property unless the rights are not created in their favour by way of Gift. 

Amor (Worker)     31 December 2010

can we do another separate settlement deed between the mother and son in order to change absolute ownership into joint ownership? As one of the son want his share from mothers property, mother wants to sell it.

And also we can take the benefit of exemption for capital gain tax u/s 54.

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