Personal loan/tax

L

Lulux77

Registered User
Messages
21
My nephew wishes to buy a bit of land adjacent to his house for €40000. We have discussed the matter and his financial position. I would like to loan him the full amount on condition that it is paid back within a specified period. There will not be any interest charged on the loan. A private arrangement between us both. Just wondering if there is any tax implications for either of us with this arrangement?
 
Hi, the interest not charged would be treated as a gift to him. But it would be less than 3k per annum, so falls under small gifts exemption.
Only becomes a consideration if you provide other gifts to him during the course of the loan.
No tax implications for you.
 
I agree with Redonion. The only thing I'd add is to have a formal loan agreement signed by both parties setting out the repayment terms etc. This is to show that it is a loan with repayment terms and not a gift. A one page document should be fine for this purpose.
 
You must log in or register to reply here.
Back
Top