Advise please

[davcoglue]

Hello, situation is as follows.

My brother gets a 150k loan on his mortgage to help me out. After 10yrs I can pay the loan plus interest accumulated from mortgage company. About 220k in total. My brother is a very high earner so needs to keep his income down. Are we right in thinking the interest on the loan will be classed as income for my brother even though it is what the mortgage company charge? If so this will push his earnings way to high.
If this is the case how do we avoid the interest being a income for my brother?

Many thanks

[pawncob]

If there's sufficient evidence that he borrowed the funds to lend to you, and the repayment only covers the interest paid, then it should be available for offset.

[bd6759]

If there's sufficient evidence that he borrowed the funds to lend to you, and the repayment only covers the interest paid, then it should be available for offset.

What provision covers this scenario? s370 charges tax on the full amount of interest arising.

[pawncob]

Can't quote provision, and I agree it seems taxable.But some years ago I agreed with an Inspector that such an act could be treated as a business and he allowed it.

[bd6759]

I'd say it would be nigh on impossible to argue that a singe loan to a family member could possibly be regarded as a trade. FCA regsitration is required for starters.