Loan not repaid

mas1964

Hi,
My husband died 6 months ago, I'm doing the probate forms because he had an ISA in his name, it's the only thing I need probate for as everything else was in joint names, except his SIPP pension which is not in probate. I'm coping ok with the forms except there's a question about gifts made in last 7 years. We lent our daughter £20,000 when she bought her house, but she's not paid any of it back yet, so will this count as a gift? It came from our joint savings so do I declare half of it. I don't think it will make any difference but I want to get it right.

Keep_pedalling

This should be treated as a debt owed to the estate, in which case it adds £10,000 to the value of the estate.

Alternatively, if you can afford it, you could treat it as a gift. If you do this £3000 of the gift is exempt, and if no gifting was carried out in the financial year previous to the gift this goes up to £6000 so would only add £4000 to the value of the estate.

getmore4less

Do you want the money back?

what were the repayment terms on the loan? it needs some to be enforceable.

if she got a mortgage it is unusual for a lender to accept a loan did you not sign something to say it was a gift?

mas1964

Hi, thank you both for the replies. There was nothing about repayment terms it was just a case of pay us back when you can we were happy for it to be a gift but daughter is very independent and insisted on it being a loan but nothing was formal. I will treat it as a gift on the probate forms I can easily afford it as since then we came into inheritances and now have husband's work death benefit.
Thanks again.

getmore4less

What that does is reduce the transferable nil rate band to your estate.

Useful to document and let your executors know.

mas1964

Yes, thank you, I will keep a record. Forms now posted, cross fingers all goes well.