Loan with family
Other

Chris White
Chris White
3 Thanks
153 Posts
11 years ago
0
Yes – no problem at all. Interest paid on a loan (or further loan) from family or friends is eligible for a tax deduction just as with any other loan, provided it is to finance the let property. Will your parents have a charge on the property? I’m not suggesting they should or shouldn’t - just that a higher interest rate could be justified if the loan is unsecured. That might be an overall advantage to the family in terms of tax if say, you are a higher rate taxpayer and your parents aren’t. Are they both taxpayers? Whichever way, the loan arrangement ought to be properly documented in case of HMRC queries.

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