Secured loan

Kathy_Adams

planning to lend money, charging fixed moderate annual interest with no plan for repayment but a legal charge over borrower’s property. So, a whole of life loan equally split between a couple. I need provision for the death of either borrower and for my own death. If the debt were to be considered settled on my death, would this be viewed as a gift by the tax man?

Worried_fool

Do you have a license to lend money at interest? If not, you are likely to be caught by the laws that make loan-sharks criminals.

Jemma01

I believe so yes, it will be a specific gift if it is cancelled at the point of the lender's death. Iht applies and paid by the estate, I don't know what will happen if estate can't afford to pay it.

I strongly suggest you use a solicitor to lay down the loan agreement.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm26011

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/82145546#Comment_82145546

This generally won't be the case in a loan between friends or family, which will almost always be non-commerical and not fall under the cca (1974) or the FCA. However there might be other considerations such as tax payable on interest and so it would be best to get legal advice.