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Old 06.08.2015, 16:35
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Private interest free loan

If two people living together come to an informal arrangement for an interest free loan between them, does this need to be declared on the the tax return or one or both, and if so, is any tax due?
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Old 06.08.2015, 17:22
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Re: Private interest free loan

You may have to demonstrate that it is a genuine loan, not a gift or income which would be taxed.

The authorities may notice it in your net worth declaration depending on how much it is.

I don't know if they would challenge an interest free loan as effectively a gift - but given the current rates of interest that would be a bit hard, even interest free is 0.75% over the base rate which is low but not "free".
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Old 06.08.2015, 17:44
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Re: Private interest free loan

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If two people living together come to an informal arrangement for an interest free loan between them, does this need to be declared on the the tax return or one or both, and if so, is any tax due?
I would draw up an agreement detailing the terms of the loan and each sign it. I would then declare it in your tax returns as an asset and a liability respectively. Assuming you have separate bank accounts and keep a copy of the proof of the transfer of the money from one person's account to the other's, I don't see why the tax authorities would have any problem with it.
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Old 06.08.2015, 18:33
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Re: Private interest free loan

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If two people living together come to an informal arrangement for an interest free loan between them, does this need to be declared on the the tax return or one or both, and if so, is any tax due?
A loan is a loan, if its small it's irrelevant if its substantial show it in your tax return. As no interest is involved then Zero tax liability.

Remember when you make a loan, it's subject to risk & it's very likely you will never get it back in the circumstances you describe, been there done that chance of full repayment is less than 10% even when the person is a multi millionaire 20 years later.
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