Parents are providing funds for property purchase by daughter as an interest free loan so I believe no tax implications except that any remaining unpaid loan would still be part of the parents estate on their death. Both parties want to protect their position in case the daughter marries or suffers any misfortune and avoid the possibility of the house being sold but proceeds not used to repay the loan. They plan a simple written nil interest loan agreement and to register a legal charge on form CH1 to add some protection. Does anyone have any thoughts please on this plan?
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An issue for a solicitor surely?
Given the potential for getting the 'simple' agreement wrong.
No tax issues
other than IHT but you have already mentioned that you understand that the debt will be included within the lenders' estates.
There are no immediate tax issues in respect of the loan/charge.
Incidentally, if the parents want to discharge the loan at some stage in the future this will probably need to be done as a formal deed. It would then be a PET for IHT issues.