Tax on income from friend to clear debt

CuriousUser

Hello everyone,
I hope you are all well
I am a bit reluctant regarding the following matter: I moved abroad, within the EU and a friend of mine who is still in the UK has a debt to pay towards me which we agreed that it will be paid in installments. Now, this person made good money playing online slots/poker so he is paying the total amount which is totaling £60,000 in installments of around £5,000 per month into my UK bank account. Do I have to pay tax for this amount? 
Not sure if it is important, but I have a residency abroad, I have dual citizenship (British including) and the money is being used to buy a property abroad.
Any thoughts are much appreciated. 

TadleyBaggie

Short answer: No. 

General_Grant

CuriousUser said:

Hello everyone,
I hope you are all well
I am a bit reluctant regarding the following matter: I moved abroad, within the EU and a friend of mine who is still in the UK has a debt to pay towards me which we agreed that it will be paid in installments. Now, this person made good money playing online slots/poker so he is paying the total amount which is totaling £60,000 in installments of around £5,000 per month into my UK bank account. Do I have to pay tax for this amount? 
Not sure if it is important, but I have a residency abroad, I have dual citizenship (British including) and the money is being used to buy a property abroad.
Any thoughts are much appreciated. 

If all of the money paid to you is simply a re-payment of money you lent him and there is no interest (or other addition for having lent the money) then there is no tax to pay in the UK.

If you are buying property abroad then doubtless that country's regulations will apply to your explanation of the source of the £60,000.  If you could afford to lend that amount, I'm guessing you could afford to pay for proper legal advice in your country of residence.

Albermarle

Now, this person made good money playing online slots/poker 

Not very advisable to lend money to people who are spending their time on these activities ........

CuriousUser

Albermarle said:

Now, this person made good money playing online slots/poker 

Not very advisable to lend money to people who are spending their time on these activities ........

I agree, but let's say it was a decision based on care and love, not a rational one I took. So far, I got back around £40k 

CuriousUser

If you are buying property abroad then doubtless that country's regulations will apply to your explanation of the source of the £60,000.  If you could afford to lend that amount, I'm guessing you could afford to pay for proper legal advice in your country of residence.

Thank you for your input, it is much appreciated. Now, I do not have any concern regarding paying tax here for that income, I do have a concern when it comes to receiving a potential letter from the HRMC stating that I have to pay tax for £60,000 I received from my friend.

Nebulous2

There are potential hurdles you have to face on this money, but HMRC looking for tax on it is well down the list. 

Banks are expected to watch out for suspected money laundering, and may question regular large payments, which are then moved overseas. Freezing your account while they investigate is a possibility. 

General_Grant

CuriousUser said:

If you are buying property abroad then doubtless that country's regulations will apply to your explanation of the source of the £60,000.  If you could afford to lend that amount, I'm guessing you could afford to pay for proper legal advice in your country of residence.

Thank you for your input, it is much appreciated. Now, I do not have any concern regarding paying tax here for that income, I do have a concern when it comes to receiving a potential letter from the HRMC stating that I have to pay tax for £60,000 I received from my friend.

When you quoted my post, you missed off the first paragraph which basically said straightforward repayment of a loan to a friend was not subject to tax.  So I don't see why you would think HMRC might seek tax from you for this repayment.

Sea_Shell

Have you got access to other money for if (when) they freeze your account to investigate the source of the funds?

There is a risk you'll be tarred by the brush of your friend's financial management.

pbartlett

your problem by an order if magnitude is not hmrc but the bank freezing your account suddenly and without warning.

Keep_pedalling

TadleyBaggie said:

Short answer: No. 

Unless the payment includes interest.