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Urgent Help Please - Inheritance Tax Question re loan and life limiting illness
Hi everyone I put this in the tax section but realised it might be more suitable here. I would really appreciate some help.
My husband sadly been diagnosed with a life limiting illness and he is very unlikely to live anything like 7 years. This has come as a huge shock to us all and has been very difficult to cope with.
My husband needs to make a payment of £25,000 for something by the middle of next month which he no longer has the money for. A relative has very kindly offered to lend him the money on an interest free basis for 6 weeks.
At the end of the 6 weeks my husband will get a payout from a policy and will be in a position to pay back the relative in full.
I am just concerned that the relative would be subject to an inheritance tax payment if /when my husband dies within in 7 years as it will show in their accounts as a lump sum payment.
It is a genuine loan repayment (not a gift) - if we draw up a piece of paper confirming the agreement with the above on it that they both sign and then keep it with print outs of bank statements to show the transfer or cash one way and then back the other way would that be sufficient to ensure that it isn't viewed as a gift?
Does anyone know if there is a basic letter layout we could use if that is the case.
Thanks for any help x
My husband sadly been diagnosed with a life limiting illness and he is very unlikely to live anything like 7 years. This has come as a huge shock to us all and has been very difficult to cope with.
My husband needs to make a payment of £25,000 for something by the middle of next month which he no longer has the money for. A relative has very kindly offered to lend him the money on an interest free basis for 6 weeks.
At the end of the 6 weeks my husband will get a payout from a policy and will be in a position to pay back the relative in full.
I am just concerned that the relative would be subject to an inheritance tax payment if /when my husband dies within in 7 years as it will show in their accounts as a lump sum payment.
It is a genuine loan repayment (not a gift) - if we draw up a piece of paper confirming the agreement with the above on it that they both sign and then keep it with print outs of bank statements to show the transfer or cash one way and then back the other way would that be sufficient to ensure that it isn't viewed as a gift?
Does anyone know if there is a basic letter layout we could use if that is the case.
Thanks for any help x
0
Comments
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It'll count towards the value of the estate if it was a gift, which would only then be subject to Inheritance Tax if the estate was above £325,000.
I wouldn't worry as this is clearly not a gift in any case as net amount gained is nil.
Still, for such a figure, I'd be contacting your family solicitor to draw at least something up.
In debt and looking for help? Look here for the MSE Debt Help Guide.
Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.0
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