Can we lend our son money?
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Would you be charging interest on the loan?0
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Hi,
No we wouldn't, but could if it made it possible!
Thanks0 -
If you're not charging interest then there are no tax issues.
Where there may well be issues, however, is in enforcing repayments. This forum is littered with tales of people lending money to friends and family, then coming unstuck when the loan isn't repayed. The general advice is to look upon it as a gift, with no expectation of it being repayed. If it is repayed then that's a bonus.0 -
As long as you get a "contract" stating its a loan and not a gift then all is well.
Its when its a gift and you if you pass away within a certain period where there is tax due0 -
If you were to die within seven years then Capital Trtansfer Tax may be payable on a sliding scale, but you really need to take professional advice for a sum as large as this, imho.I used to think that good grammar is important, but now I know that good wine is importanter.0
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Please also note that if you are lending this sum of money to your son to assist in a house purchase, the mortgage lender may insist on seeing a statement that the funds are a gift, not a loan.
If the sum is a loan, they may consider it a debt liability for the purposes of arranging his mortgage and he may not be offered the sum he needs to purchase a property.Some days, it's just not worth chewing through the leather straps....
LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!
May grocery challenge £45.61/£1200 -
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If you are gifting your son money and you die within 7 years then inheritance tax may be liable on a sliding scale depending on size of your estate (not capital gains as someone said up thread). If you are loaning him money and not making a profit (ie charging interest) then there is no tax to pay either by him or by you.
If this is to buy a property then the bank needs to know he will have an additional loan to pay in addition to the mortgage if applicable and you need to state you have no interest in the property.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0 -
gift it. he is your son0
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