Lending money to family

NeoPerspex

Hi- I wish to lend my brother about £7000-£8000 for a year or so, how do I do this without breaking any law or leaving myself liable for tax?

Would I be ok to simply send him the money and he send it back as agreed?

Thankyou for reading,
NP

zppp

NeoPerspex wrote: »

Hi- I wish to lend my brother about £7000-£8000 for a year or so, how do I do this without breaking any law or leaving myself liable for tax?

Would I be ok to simply send him the money and he send it back as agreed?

Thankyou for reading,
NP

You wouldn't break any law or leave yourself liable for tax. But do get some kind of written agreement, and ask yourself whether you would need the money if your brother was no longer able to pay.

iolanthe07

Only do this if you can afford to lose it. Read some of the posts here about lending to family - it often ends in tears.

NeoPerspex

Thanks for the warnings... I have acknowledged the risks

Just want to make sure I wouldnt be getting a nasty visit from the taxman or police regarding it! (A nice one I can handle)

Thankyou

bouncydog1

Why do you think you might get a visit from the taxman or police? Is the loan to fund something illegal?

paddyrg

Assuming you're not charging interest and treating it as a gift you may get regifted to you (the only way you can consider a family loan to make sure it doesn't end in tears), you're good to go :-)

jonesMUFCforever

I have only one word of advice. Don't do it unless you are prepared for it not to be repaid.
I know that is more than one word by the way LOL

cos_2

Lol@Jones

opinions4u

I think this link is well worth a read (from the top of the forum page).

If you gift the money and expect it to be gifted back, their are potential IHT issues if either of you croaks.

If you charge interest on the money, as a good honest citizen you should declare it to HMRC as income and pay tax on it.

If you don't want long term resentment with the person borrowing, don't lend.