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Loan large sum of money to relative
Comments
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Write out a contract, the more specific, the better... What does Judge Rinder get Michelle to do every time there's something in writing? Jazz Hands!0
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You trust them and are prepared to lose the money.
That doesn't square with wanting a contract written up.
If you really do trust them just write a cheque so you have a paper trail, and consider payments back to be a bonus.0 -
Any interest they pay you on the loan is taxable.foxy-stoat wrote: »
Tax is not really an issue - not sure why you would think a loan is taxble.
That's not an issue if it is a short term loan with little or no interest - but very important if you make the loan long term.
I agree it is important to have a written agreements, and where possible have the loan secured against their property. Circumstances change (yours and theirs) and a charge on their house provides clarity 25 years down the line. One example is if they ever need to go into care and the local council use their assets and secure a charge against their house to pay for that care - they won't entertain any suggestion that there is a loan to be repaid without properly executed paperwork or a charge on the property.Optimists see a glass half full
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be
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You trust them and are prepared to lose the money.
That doesn't square with wanting a contract written up.
If you really do trust them just write a cheque so you have a paper trail, and consider payments back to be a bonus.
It doesn't square with the OP's original post, either. If he trusts them so much and is prepared to lose the money, why not just give it to them rather than post on here asking for advice about contracts?0 -
Because, as the OP clearly stated, they wanted advice on the practicalities, such as tax implications.It doesn't square with the OP's original post, either. If he trusts them so much and is prepared to lose the money, why not just give it to them rather than post on here asking for advice about contracts?Optimists see a glass half full
Pessimists see a glass half empty
Engineers just see a glass twice the size it needed to be0 -
Good point, pvt. Could there be tax implications with a gift? Can't think there are with a loan. Maybe it's a loan in name only...0
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Thanks Malcnascar, excellent advice just what I was looking for. Also thanks to others for some useful recommendations.0
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