Debt & inheritance tax - options wanted

Paragon

I have a slightly odd situation whereby I borrowed about £15000 from my parents to help me train and get a decent job which I have now have. I can now afford to repay £600 a month and could therefore be debt free (ish - still have student loans) in about 2 years.

However, my folks have said that they don't need the money back and may well never will, but they want interest on it which I have always paid monthly to stop the ammount growing. They currently want 4.8%. The thing is, I would love to be debt free again, but if I repay them and they both die in the next 7 years, the money will come back to me and my siblings minus 40% inheritance tax which seems like a terrible waste - we pay enough tax as it is.

What are my options as you see it? I am quite good with money, but am nervous about saving such a large sum in case they need it back and not spending it although it would be in my account.

Cheers,

postingalwaysposting

bump


i have no answers on this however havent the conservative party said you dont have to pay inheritance tax on anything under a million but i suppose unless they 'take over' and that stands within the next 7 years you are still 'stuck' oh and of couse if they are giving you more thank one million

calleyw

Paragon wrote: »

I would love to be debt free again, but if I repay them and they both die in the next 7 years, the money will come back to me and my siblings minus 40% inheritance tax which seems like a terrible waste - we pay enough tax as it is.

The same thing will happen even if you don't pay it back and they die within 7 years unless you have proper loan agreement drawn up.


http://money.guardian.co.uk/aforeyego/story/0,,1082746,00.html

As you can only gift up to £3K max per year you had 15K I assume in one year.

You can carry forward for up to three years but that is it.

I think you and your parents need to get proper advice on this.


Yours


Calley