Complex Mortgage/Loan Situation

getmore4less

davidmcn said:

getmore4less said:

davidmcn said:

getmore4less said:
Is your relative declaring the income from you(Interest on the loan they gave you) and paying the relevant tax?

I presume the OP means the relative has borrowed from a commercial lender and the OP is reimbursing them for the repayments - in which case there are no tax implications.

The relative cannot offset their commercial interest costs on the interest they receive from the money they loaned to the OP
They should be declaring it as income.

I meant "commercial" as in the relative has borrowed from a lender whose business is lending i.e. a bank, not that this is related to a business run by the relative. There is no tax relevance.

I understood what you meant by commercial.
The op has borrowed off a relative and is paying interest that interest is taxable income for the relative.
The relative can't then claim that tax back because they are paying interest to someone else on a commercial loan
The two loads are unconnected. 
If it was that easy to avoid tax implications someone that wanted to give money away could just borrow £1 of that person at an extortionate interest rate and just pay that interest not taxed for the recipient  and no future tax implications for the payer of the interest as they have not gifted they have paid interest.
https://www.bdo.co.uk/en-gb/insights/tax/private-client/making-a-family-loan-watch-out-for-the-tax-issues

Lot of people do it or it is only small amounts that does not make it right.