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A non-EU citizen makes a large loan (cash would need transferring

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A non-EU citizen makes a large loan (cash would need transferring from foreign currency accounts abroad) to their daughter (a UK resident non-EU citizen) - when is any tax liable and when can they write it off? Ditto for loan to a UK citizen and resident son-in-law.
Submitted: 9 months ago.
Category: Tax
Customer: replied 9 months ago.
The non-EU citizen is also non-resident also if that wasn't clear
Expert:  bigduckontax replied 9 months ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Loans are outside the scope of UK taxation unless interest is paid thereon in which case the interest only is taxable under the UK Income Tax (IT) regime in the the lender's hands if he or she is liable to UK taxation. One point, it is adviseable to warn the bank of incoming funds and their source to preclude any money laundering inquiries a large transfer might attract. If the loan is written off it becomes a gift, but the UK has no Gifts Tax regime anyway. Thank your lucky stars they don't live in France where gifts tax kicks in at 5K Euros! I do hope that I have managed to set your mind at rest on this matter.
Customer: replied 9 months ago.
I only asked as I know with loans to directors in UK companies a loan to a director is taxed if not repaid within a year and I assumed loans between private individuals was taxable e.g. What if a parent gifted or loaned money to a child for working in a business (I know they miss out on an expense but NI and higher rate tax could be avoided if it's big money)-so no boundaries to play within (btw u can speak to me as an ACA)
Expert:  bigduckontax replied 9 months ago.
You are correct in your surmise regarding loans to directors by limited companies. However this does not apply to loans between individuals. I could not possibly comment on loans made by individuals instead of salaries for work undertaken for a company. Quite simply that is tax evasion, a criminal offense; sorry.
Customer: replied 9 months ago.
It is, but seems it's possible to do 'legally'. That's remote to me so I will stop there. Do you know what is considered large for money laundering purposes at the bank?
Customer: replied 9 months ago.
That was last question!
Expert:  bigduckontax replied 9 months ago.
No, it comes under HMRC's province and of course they keep tight lipped about it! My advice was merely precautionary, an attempt to save a lot of hassle.
Customer: replied 9 months ago.
Thanks for this! Even as a chartered accountant, I couldn't get any success goggling this or reading round HMRC site!
Expert:  bigduckontax replied 9 months ago.
Some HMRC web sites can be quite deadly, particularly where Stamp Duty Land Tax (SDLT) is involved. Please be so kind as to rate me before you leave the Just Answer site.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3099
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 9 months ago.
Thank you for your support.

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