£60k loan or gift?

headbanger_2

Hi,

Possibly have this in the wrong section, please move it if need be admin...sorry!?

We have £60k left on our mortgage and our parents are offering to give us the £60k to pay off the bank and we instead pay them back monthly with no interest etc. I’m worried about the taxman! What’s best (i.e. less penalties), declare it as a gift, or as a loan, and how do you go about declaring it?

Thanks for your help in advance…

zopamember

As far as I know it doesn't need dislosed to the revenue at all, but treat it as a loan. There are no tax implications attached for you or your parents on an interest free loan of this nature.

The only potential tax implication of a gift is an inheritance tax charge if your parents die within 7 years of the gify.

Mrs_pbradley936

I think a loan is the way to go, if you want you can have something drawn up by a solicitor. We were glad when we did that for one of our sons after his marriage split up. It meant that the money given/lent was not part of the assets had we not had this ex daughter in law would have walked away with 25k of our money!