Will I owe tax?

T

taxbill

Registered User
Messages
16
If you receive a loan and the lender (your father) dies before you have a chance to repay it does the loan become a gift?
 
If your father is now saying he doesn't want it back, it has become a gift (well unless you're the Taoiseach!). However, the amount you can receive from your parents before paying tax is €496,824 so you probably have no tax payable.
 
Hi Nige,

it's not quite like that. He is not saying he doesn't want it back. It is still a loan and we are still within the period that we expected me to hold on to it.
 
Ah, get you. Sorry.

Well, maybe you would be best to put this loan in writing. Generally, a loan does not get written off because someone dies, it is repayable to their estate and so would form part of your father's assets (to be distributed according to his will).

However, if he wishes it to be written off on his death, it will then become an inheritance to you.

So, in either case, if it is not repaid, it will eat into your tax free threshold for CAT.
 
Thanks Nige, that explains it.

One last question about the balance remaining.

Can one write off the amounts that have been repaid if they were all cash payments or items in liew of cash.
 
If you were subject to an audit, I really can't say if the Revenue would be happy with the records you have.

Remember, that you submit returns based on the facts and then if the Revenue audit you they will start off presuming you have been honest.

In the meantime, it might be helpful if you would prepare a list of payments to date and have your father sign it as evidence.

Do you have any siblings who are likely to challenge this?
 
You must log in or register to reply here.
Back
Top