A parents' loan will be repaid after the family home is sold. Any tax?

talldad

My ex-husband and me jointly owned a property (the only property for both of us). The English Family Court has asked the family home to be sold so there is a clean break. As the family home was purchased with the help of a loan from my parents, my parents will be repaid using the net proceeds from the sale of the family home (every party in the process agrees). My understanding is that neither myself nor my ex-husband will need to pay any tax for the share of money that will be given to us after the sale of the family home. The conveyance solicitor who deals with the sale of the family home will transfer the money (their loan money) directly to my parents' account. My question is will this be likely to incur any tax for my parents? Will the taxman look at it in a way that my parents receive an income from a commerical sale? But in reality they are simply receiving their loan money back.

What I have is a court order indicating a fixed sum of XXX pounds need to be repaid to my parents? Will my parents need to show the court order to HMRC so they will not be charged for any tax when they receive their loan money back? My parents are living abroad. How will process work? Please advise. Thank you very much.

Jeremy535897

There is no UK tax on the repayment of a personal loan like this. I suppose it is conceivable that there might be in their country of residence.

For information on your and your husband's tax position, see:
https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-spouses-civil-partners-divorce-dissolution-and-separation-2016

Keep_pedalling

Unless the repayment includes interest there should be no tax.