Would this attract income tax?

Kingy1981

Hi all,

I've done a search and all I can find is relating to 'gifting' from a job perspective.

My aunt has loaned me £22k in order for me to place down a deposit on a house.

I do have to pay it back, we have informal agreements in place.

However, if I declare it as a loan to the mortgage company (no matter how loose the terms and timescales are of paying it back) I'm concerned that they will use that against my affordability of the mortgage and reduce the amount I would be offered.

However, if I declare it as a gift, am I liable to pay income tax on it?

In the event my aunt doesn't live for another 7 years, I understand it remains part of her estate, but I don't think the estate it worth over £650k, but I couldn't be sure.

My basic question is, if it's a gift, would I need to pay income tax on it? Let's assume the estate is under the inheritance tax value.

Many thanks.

jimmo

There is no Income Tax on gifts but you may want to consider whether it is a gift or loan. Take a look at this thread.
https://forums.moneysavingexpert.com/discussion/4691929

Kingy1981

That is very helpful Jimmo, thank you so much.

p00hsticks

Kingy1981 wrote: »

Hi all,
My aunt has loaned me £22k in order for me to place down a deposit on a house.

I do have to pay it back, we have informal agreements in place.

I'm pretty sure you don't need to worry about income tax on it

BUT if there is any interest element to the loan (i.e. you intend paying your aunt back more than the original sum borrowed) then I have a feeling that your aunt would potentially be liable to paying income tax on the interest and shoud lbe declaring it to HMRC...

somethingcorporate

No lender will accept a loan as a deposit for a mortgage.

If you cannot afford to save for a deposit you cannot afford the expenses that come with running a household.

For a lender to accept it the loan will have to be a gift, with no strings attached and no repayment of it.

Lying about this on the mortgage application would be fraud.