Lending a friend money?

SwordofLight

Sorry guys I have no idea where to post this.

Imagine you have a friend in college, and working part-time at Burger King. He doesn't make very much.

You offer to give him a few grand to help him out in exchange for a percentage of his salary when he finds a good job after college (paying you for a pre-agreed length of time say 5 years). He also agree's to help you out with a few jobs within his skillset during the wait for a decent job.

I am wondering if I need to declare the money I give him; if I could get an official contract drafted by a solicitor; and how this arrangement differs from a bank loan.

Would there be taxation involved? Gift tax or some such?

blindside88

TBH I wouldn't touch that with a barge pole. Reads a lot like extortion by the amout he would end up paying you along with doing odd jobs. Nightmare situation for all involved. A general rule of thumb is money and friends don't mix

jus_tin4

could he not just go to the CU?

Theflyingegg

Bad idea! You're a friend not some sort of bank!

In my experience this sort of stuff never ends well.

R0N BURGUNDY

See Sopranos - Chris laying down a beating on JT

whatawaster81

Under the statute of frauds a contract that cannot be performed within 1 year of the making thereof must be evidenced in writing to be legally enforceable.

A note or memorandum will suffice as long as it includes the essential terms.

whatawaster81

Under the statute of frauds a contract that cannot be performed within 1 year of the making thereof must be evidenced in writing to be legally enforceable.

A note or memorandum will suffice as long as it includes the essential terms.

I would assume it differs from a bank loan in that you are not charging interest?