Are loan repayments income?

Addle

If someone lends me a large sum of money and I make monthly repayments to them, does the creditor have to declare those repayments?
Can they be treated as income even though they're just repayments of a debt?
There's no interest involved.

Tow

No

Gaillimh1976

Addle wrote: »

If someone lends me a large sum of money and I make monthly repayments to them, does the creditor have to declare those repayments?
Can they be treated as income even though they're just repayments of a debt?
There's no interest involved.

Might have to convince Revenue there is really no interest depending on how 'large' we are talking

But if genuinely no interest, then it's not income

Only the Interest element of any repayment is income

(But in the same way, you can't claim the repayments as a tax-deductible business expense, only the Interest if any)

Addle

Thanks for the replies.
It is a large sum but not a gift as it will be repaid.
We're getting legal advice on it and it will all be above board.
Definitely no interest being charged.

scheister

Addle wrote: »

Thanks for the replies.
It is a large sum but not a gift as it will be repaid.
We're getting legal advice on it and it will all be above board.
Definitely no interest being charged.

It will mostly be seen that giving an interest free loan is actually a gift. CAT will be due based on what else the person could have done with the money. ie if they left it in a current account rather then loaning it to you the gift would be the lost interest to them.

Addle

I understand and don't mind if I incur a liability, I just don't want the lender to.

exaisle

scheister wrote: »

It will mostly be seen that giving an interest free loan is actually a gift. CAT will be due based on what else the person could have done with the money. ie if they left it in a current account rather then loaning it to you the gift would be the lost interest to them.

Aren't you forgetting the small gift exemption?

With such low interest rates, it would have to be a huge loan (maybe in excess of €400,000) for the interest lost by the lender in giving an interest free loan, to exceed the annual small gift exemption of €3,000.

OP hasn't mentioned the amount of the loan other than to say that it is a "large" sum of money so it's difficult to be more specific.

scheister

exaisle wrote: »

Aren't you forgetting the small gift exemption?

With such low interest rates, it would have to be a huge loan (maybe in excess of €400,000) for the interest lost by the lender in giving an interest free loan, to exceed the annual small gift exemption of €3,000.

OP hasn't mentioned the amount of the loan other than to say that it is a "large" sum of money so it's difficult to be more specific.

Not forgetting just did not mention.

Addle

Thanks. It's a large sum for us but nowhere near €300k!