Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
No, it is not in my opinion a gift, merely the settlement of inter personal private debts and thus outside the scope of UK taxation. Of course, if interest, is paid then this interest is income in the hands of the recipient and must be declared.
I do hope that I have been able to set your mind at rest on this matter.
You are correct, the repayment of such debts is outside the scope of UK taxation and does not and indeed should not be declared.
The UK has no gifts tax regime so any gift is tax free in your hands. The matter of the Potentially Exempt Transfer (PET) and its effects on Inheritance Tax (IHT), the seven year taper, you seem to have grasped. There is an outside chance that you could be liable for IHT on a PET were the donor to die and have insufficient funds to meet their IHT bills.
Thank you for your support.