Taxes

sunsetstrip

I legally leant a relative money with an interest stipulation 5 years ago ( drawn up by a solicitor) The loan has been repaid this year with interest. I will declare the interest on my tax form. Can i go back to previous tax forms and add each years interest as i was well under the £1k allowance leaving me with no tax to pay at all on the interest. 

Misslayed

Move requested

FatherTireseus

Do you mean that all the interest payable was paid in one lump alongside the capital repaid at the end of the loan?  

To be able to declare it on previous years tax returns you would need to have actually received interest in the year in question. 

HMRC's rules are that interest is taxable when it is actually received or made available to the recipient to freely draw upon.   If your relative only repaid the capital at the end of the loan and not in yearly instalments,  then it will all be taxable in the year it was received. 

HMRC's manual has some guidance including examples- example 3 may be of particular relevance.

https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2440