Interest-free loan to relative abroad. Tax implications? Need to declare?

chssvl

I will need to lend some £8-10k to my mom to pay off a bank loan with a high interest rate. She lives abroad and is not and has never been a UK resident.

I would lend her the money interest-free and, as far as FX fluctuations are concerned, if it goes in my favour I will let her keep the upside and if it goes against me I will just write off the difference, i.e. I will never receive more than the amount I sent in £.

Question is, do I have to make some sort of declaration? I mean, if my bank account starts receiving mothly payments from abroad in six months or so, will HMRC start getting curious and, if so, would I need to prove that this is a not-for-profit loan? Thanks

[Deleted User]

I really don’t understand what you believe you will have to declare! There is no income, interest or profit.

HMRC has no access to your bank accounts in any case. 

Dazed_and_C0nfused

[Deleted User] said:

I really don’t understand what you believe you will have to declare! There is no income, interest or profit.

HMRC has no access to your bank accounts in any case. 

Unless you're very very naughty 😳

chssvl

Ha ha ha. Thanks. I guess I'm being overly paranoid but just sort of wondered if the bank had a duty to report to HMRC if they see something that would resemble some sort of undeclared income. But yes, I am that paranoid

Brie

The only issue might be if/when mom pays the money back and you get a big chunk of ££ into your account.  HMRC won't care but the bank should check for nefarious things like money laundering etc.  Best to tell the bank when the money is expected back so they don't do anything silly.