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bigduckontax, Accountant
Category: Tax
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I am fortunate enough to have some spare cash that i would

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I am fortunate enough to have some spare cash that i would like to loan to my parents so they can put it into a savings account in order to get them some interest for pocket money the loan from me to them would be interest free but re-payable on demand.
question is if anything should happen to them ) how would i prove to the tax man that the money is mine and not a gift from them under the 7 year inheritance regulations they do not charge CGT on my own money.
Hello, I'm Keith and happy to help you with your question.

Make sure that the loan is evidenced in writing. The statement should indicate the amount of the loan and specify the interest to be paid [none in this case] and the repayment schedule. In the unfortunate event of your parents' demise then you can present the document to their executor and get your money back. This will also protect the moneys from inclusion in Inheritance Tax calculation as a gift.
Customer: replied 3 years ago.

should the document be signed by an independant witness or will myself and parants suffice

You could have a witness, never a bad idea. It is not essential, however.
Customer: replied 3 years ago.

could you please give me some idea how to word the document.

It doesn't have to be terribly formal; try this.




I, XXX XXX, hereby loan YYY YYY the sum of GBP NNNN for ultimate repayment. This loan bears no interest and there is no repayment schedule although one may be imposed by the lender from time to time.


Signed : XXX XXXX


Signed: YYY YYYY


Witnessed by: ZZZ ZZZZZ



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Customer: replied 3 years ago.

Thanks for the advice. excellent, your help much appreciated.

Thank you for your support.