Tax implications... - HotUKDeals
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Tax implications...

gaanja Avatar
6y, 10m agoPosted 6 years, 10 months ago
Would appreciate some advice on this please.

If I were to lend some money on a monthly basis to a family member over the course of say 2 years and then get a lump sum back in the future, would there be any tax implications given that I will be lending money from my savings account?

Does anyone have similar experiences please? I wouldn't want to be in a situation where I am needlessly taxed on top of what I already am. I am not looking for a loophole to avoid paying taxes, as I am not gaining financially through this arrangement, but rather to gather information so I am in a better position to explain it if there were to be a query at a future date.

Thanks in advance.

Cheers
gaanja Avatar
6y, 10m agoPosted 6 years, 10 months ago
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#1
No. PAYE.
#2
i would assume it is up to you if you want to lend money to someone from your savings acc. You will have already paid the tax on it when you earnt it so it should affect your tax status. if you get benefits though they may be affected, ie family credit etc.
#3
No, don't get family credit, etc. I am not too worried about lending to a family member, as I know fully well that I will get it back in the future. The only issue is with the taxman, as there might be queries when I will have deposit this lump sum into a bank account. I could explain the situation as it stands, but am wondering if there might be further queries on how this family member got this lump sum back, etc.
#4
Carley;7736481
can't see a problem then?

you lend say £10k over the course of 2 years and get £10k back as a lumper and put it back in your savings account, no issue with tax when you receive it back.


Thought as much, but wanted to make sure. Wouldn't they query where this family member got the lump sum from?
#5
True!
1 Like #6
gaanja
Thought as much, but wanted to make sure. Wouldn't they query where this family member got the lump sum from?


is the family member you are lending to on any income based allowances.? if not then you should be fine. the taxman doesnt care what you do with your savings as they dont get anything from it they just tax the interest you earn on the money not the actual money itself. if you have the money in a high interest account then you may loose out a little as obviously not putting the money in you will be getting less interest,
#7
The family member is on PAYE...no benefits as such.

Thanks for the advice. Appreciate it.
1 Like #8
nothing to do with him unless you die within 7 years of giving the loan and it has yet to be repaid as this would then fall under inheritance tax laws but interest free loans to family and friends are fine - its your money your choice what to do with it. I borrowed money from my mum and dad to help with a bigger deposit for a house - it has no tax implications whatsoever
#9
Thank you for the re-assurance.
#10
I don't know how it stands on the tax front.

But me being nosey and all that, why would you want to give £100 (£400 a month) a week to a family member (which they are not going to spend) and after 2 years get £10,000 back. Why not invest it and get some interest. :?

Also if the person you are giving the money to suddenly dies (hopefully not) not sure how you get your cash back then.
#11
For obvious reasons, and with due respect, I wouldn't want to disclose amounts involved. :)

Suffice to say that I am lending in times of need and on an interest free basis. If something unfortunate were to happen, so be it. That's life, I guess! I just wanted to be clear about any tax implications and on that front, I think I have the answers thanks to the contributors.
#12
gaanja
For obvious reasons, and with due respect, I wouldn't want to disclose amounts involved. :)

Suffice to say that I am lending in times of need and on an interest free basis. If something unfortunate were to happen, so be it. That's life, I guess! I just wanted to be clear about any tax implications and on that front, I think I have the answers thanks to the contributors.


Sounds abit snobbty but there we go ;)

Anyways, you might want to search google using appropriate terms...I'm not so sure the posts are correct in this thread. As in to say you can't just lend large sums of money\give it away etc. For a start the person receving the money could be forced into a higher tax band because of it etc....I'd dig deeper on it anyway if you want to be sure.

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