Loan Between Relatives: How to Proceed?

Posted on

Private individuals or simple donations of money between relatives and friends are a great alternative to banks and finance companies. For those who have the opportunity, lending money to private individuals saves on interest: depending on the case, in fact, it is possible to agree between the two subjects a very low percentage of interest or even nothing, or it can still completely disappear. obligation to repay, as in the case of a donation. However, when talking about Hank Morgan between private individuals, a big doubt arises: how to transfer the money in order to make the transaction in order and avoid future checks by the Revenue Agency? One of the most widespread methods is the bank transfer , but in order not to have problems with the tax authorities it must necessarily have some characteristics

Between private individuals, is a transfer fine?

money

As we have said, the transfer is very good for transferring money between relatives by way of donation or loan. For large amounts, you must first go to the notary to formalize the donation by public deed before two witnesses. In the latter case, the purpose of the transfer must then be the following

For small amounts , however, only the transfer is sufficient . It is therefore not compulsory to proceed even to a private deed, even if it is nevertheless a advisable practice in the event of incursions by the tax authorities. As for the purpose of the transfer in this case there are no precise rules, but you could use something like “Father / Mother Gift” depending on who made the donation. The idea is therefore to use rather generic terms from the legal point of view (not therefore as a “donation”), specifying, however, the relationship between the interested parties.

In the same way also to specify in the reason for payment the motivation of the donation can be useful, but only if it concerns events like “birthday”, “marriage”, etc., and in this case it is also good that the dates of the transfer and the anniversary are very close. It is absolutely necessary to avoid expressions such as a “gesture of gratitude” for a particular activity carried out by the beneficiary of the donation: this in fact could lead the Revenue Agency to think that the transfer of money is actually the payment of a non-invoiced professional service.

And for family loans?

loans

If, on the other hand, it is not a donation, but a non- interest- bearing loan (without interest) between private individuals, the purpose of the transfer should be precisely ” Interest-free loan of […]” , reporting the date of the private agreement that establishes the terms of the loan. To avoid problems, it is finally advisable to register the loan agreement between private individuals.

Leave a Reply

Your email address will not be published. Required fields are marked *