Gift, Loan or Purchase?

Is it a gift? Is it a loan? Is it a purchase ?

It has to be one or the other!

However, often people do not make it clear which...which leads to arguments in the future 

If you provide money to someone, you need to agree and record in writing whether that money is a gift, a loan or a contribution towards the price of an asset.

Gift

The Donee needs to get an acknowledgement from the Donor that the payment is a gift and that the Donor is not acting under duress or undue influence (especially where the Donor is old and frail and the Donee is looking after him). The Donor needs advice on Inheritance Tax consequences.

Loan

Both of you need to record the triggers for repayment (a date or future event), any time allowed to raise the money, interest rates and security (in case the Borrower goes bankrupt).

Purchase price

If the money is to go towards a purchase, then you both need to record the percentage shares, rights to force a sale and what happens on death, divorce, falling out etc.

If you do not do this, arguments about the nature of the transaction can happen later š not necessarily between the original parties, but between one of them and the relatives (after death) or Trustee (after bankruptcy) of the other.

Call 

• Michael Breeze on 07900 195 195 

•  0845 270 2511 

to set up an appointment