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Loan from a friend

Initiate

Views 775

Replies 3

Hi Team, 

If I am to take a loan from a friend for up to $30,000 for say a period of 4 years, does that money count towards my taxable income? If not, then 

a) is there any limit to the amount I can borrow tax free? 

b) how long can I borrow it for ? 

c) what documentation would I need to showcase for this? 

These questoins might be basic info but I am new to the tax system, so please bear with me. 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Former Community Support

Replies 0

Hi @hkvirk 

 

Thanks for reaching out.

 

Without knowing more about your personal or business tax situation, we can’t give tailored advice here on ATO Community, we can just give general advice and point you to the information on ato.gov.au

 

I recommend you contact Early engagement team for an opportunity to discuss the tax outcomes of complex transactions.

 

 Thanks

JoA

3 REPLIES 3

Most helpful response

Former Community Support

Replies 0

Hi @hkvirk 

 

Thanks for reaching out.

 

Without knowing more about your personal or business tax situation, we can’t give tailored advice here on ATO Community, we can just give general advice and point you to the information on ato.gov.au

 

I recommend you contact Early engagement team for an opportunity to discuss the tax outcomes of complex transactions.

 

 Thanks

JoA

Taxicorn Registered Tax Practitioner

Replies 1

a) is there any limit to the amount I can borrow tax free? 

 

No

 

b) how long can I borrow it for ? 

 

No limit

 

c) what documentation would I need to showcase for this? 

 

Whatever it takes to prove that it is really a loan, and not payment for services or some other taxable activity.

 

For that amount of money, your friend should get documentation drawn up by a solicitor.

 

Initiate

Replies 0

Thanks @Bruce4Tax & @JoA for your prompt responses.