Q&As

Can an unsecured, interest-free loan to a company be a chargeable lifetime transfer for inheritance tax purposes and does it make a difference if the loan is repayable on demand or is only repayable at predetermined future dates? Has HMRC given any view on this issue?

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Published by a ³ÉÈËÓ°Òô Private Client expert
Published on: 12 February 2021
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An interest-free loan which is repayable at the end of a defined period of time is a disposition which reduces the value of the lender's estate by the difference between the initial sum lent loan and the discounted value of the repayment sum. The loan would therefore be a Transfer of value.

An interest-free

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United Kingdom
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Key definition:
Inheritance tax definition
What does Inheritance tax mean?

Inheritance Tax is paid on an estate when somebody dies or when trusts or gifts are made during someone's lifetime.

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