Qurestion about reciving oversea personal loan (interest-free) for the UK property purchase

ricocai1994

One of my father’s ex-business partner is willing to lend me around £400K (interest-free) for the house buying in the UK. He is a super-rich Singaporean businessman.

It sounds kind of queer going on, but I knew my father saved his life 30 years ago.  

I am an international student (Taiwanese) who has already lived in the UK for eight years. 

Before receiving £400K from Singapore, I would like to ask some questions and hope somebody can give me some suggestions:

             (1)  As a non-UK citizen, could I use the borrowed money for the property purchase? (cash buyer)

             (2)   If I can use the borrowed money for the property purchase, do I need to declare the large money transaction with HMRC? Like tax paying.

              (3)    Do I need to mention the transaction to my bank before it arrives my bank account?

Anxiously awaiting some advice...

Big thanks

Steve182

  (1)  As a non-UK citizen, could I use the borrowed money for the property purchase? (cash buyer)

I see no reason why not if the money has been lent to you unconditionally

             (2)   If I can use the borrowed money for the property purchase, do I need to declare the large money transaction with HMRC? Like tax paying.

No  reason to declare that I can think of

    (3)    Do I need to mention the transaction to my bank before it arrives my bank account?

No

ricocai1994

Steve182 said:

  (1)  As a non-UK citizen, could I use the borrowed money for the property purchase? (cash buyer)

I see no reason why not if the money has been lent to you unconditionally

             (2)   If I can use the borrowed money for the property purchase, do I need to declare the large money transaction with HMRC? Like tax paying.

No  reason to declare that I can think of

    (3)    Do I need to mention the transaction to my bank before it arrives my bank account?

No

Big thanks. 

xylophone

 You mention that your father's friend is a man of considerable means and it is very likely that he has a family solicitor.

In your position,  because of the money laundering checks that will certainly be required when you buy the property, I would ask him to request his solicitor to write to you with an offer of the interest free loan and the terms on which it is to be repaid.

Although you are not bound to advise your bank that a large sum from an overseas  source is to be remitted to your account, I would certainly do so and would be prepared to exhibit the loan agreement.  Again, money laundering checks will almost certainly be made.

Voyager2002

Steve182 said:

  (1)  As a non-UK citizen, could I use the borrowed money for the property purchase? (cash buyer)

I see no reason why not if the money has been lent to you unconditionally

             (2)   If I can use the borrowed money for the property purchase, do I need to declare the large money transaction with HMRC? Like tax paying.

No  reason to declare that I can think of

    (3)    Do I need to mention the transaction to my bank before it arrives my bank account?

No

These questions should be addressed to the solicitor who will handle the purchase for you. Note that since there are laws relating to money-laundering, the solicitor will need evidence that the money was obtained legally and in fact can advise you on what papers the lender should provide.

For the same reason, banks have a nasty habit of freezing accounts when they receive a large deposit, particularly from abroad. So notifying your bank could well save you a certain amount of trouble.