Hello and welcome to the site. Thank you for your question.First of all .. if you give your son £50,000 and he repays the capital at the rate of £100pm then there is no tax implication as all he is doing is repaying the capital. Tax would be chargeable on any interest he pays on that principal sum as just repaying amount borrowed interest free is tax free.Secondly, if the sum is a loan to your son and not a gift to him then seven year rule does not come in the equation for inheritance tax purposes.What ever amount is outstanding becomes part of your estate and provided your estate including this outstanding sum does not exceed the threshold for IHT purposes (currently £325,000), there is no IHT liability. Any amount in excess of the threshold would attract IHT at 40%.More information on valuing an estate to see if IHT is due can be found here
I hope this is helpful and answers your question.
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If I give the sum but he still repays the capital for a time, is that still a "gift" ie can he have his cake and eat it?
If he still owes some of the capital when I die, can it just be deducted out of his share of the estate or would he have to actually repay the lump to the estate and then get it back as his share? This is assuming there was enough in the estate for him to be due more than the remaining sum.
Thank you for your reply.He does not have to physically repay the outstanding sum. It can just be deducted out of his share of the estate. Outstanding sum would be added to the estate to calculate IHT if any,I hope this is helpful and answers your question.