Tax implications of short term loan from sibling?

spurious · 29-04-2022 10:18AM #1

Hypothetically, if I owned house A outright (let's say worth 500k) and wanted to sell it and downsize to House B (worth 300k) and had a sibling who had the funds to lend me 300k so that if I found an ideal House B, I could buy it without having to wait to sell House A and I would then return the 300k to the sibling on sale of House A.

Apart from money laundering issues, which I presume there might be, what would the tax implications be for me?

Sibling a permanent resident of a non-EU country.

namenotavailablE · 01-05-2022 10:50AM

This page might help:

https://www.revenue.ie/en/gains-gifts-and-inheritance/valuation-date-value-certain-benefits/free-use-of-property-and-interest-free-loans.aspx

The second example on that page assumes zero interest being paid by the borrower- if some interest was paid by the borrower to the lender, you'd deduct that from the taxable value of the deemed gift. It also ignores the 'Small Gift Exemption' of €3,000 (link) which could be offset against the taxable value.

spurious · 01-05-2022 10:58AM

Thanks for that. A relatively small amount, especially if the loan was paid off within a couple of months.

Tax implications of short term loan from sibling?

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