Repaying family loan

(Newbie)Newbie

25 July 2021

hi there,

I have had to borrow a significant amount of money from my mother and my brother over the last 10 or so years. I have just had a windfall and would like to pay them back in full.

the money is a substantial amount, well above the tax free gift limit. So my question is, if I am paying back money that I have borrowed from family members, money that was promised to be repayed - would that be considered a cash gift? Or can I just pay them back the way I would pay back any other loan?

thanks

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RichATO

(Community Support)Community Support

26 July 2021

Hi @Jjames1

It is very common for private loan arrangements to exist between family members.

You can simply repay the loan as per your agreement with your family.

The money received is not assessable income for them and does not need to be declared on their tax returns.

You haven't mentioned any interest on the money. If you are paying them some interest over and above the principal repayment they will need to declare that amount in their assessable income.

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