Best way to lend £30,000 to family without losing it?

Business Forum Personal Finance
1

This isn’t about me, but my elderly relative was asked by her niece to lend £30,000 for a house purchase. Niece says she’s short that amount to buy the semi next door and combine it with her current property. Supposedly, she’ll have the money next tax year from her pension and wants to avoid taxes now.

My first thought was: “You might never see that money again,” but then I wondered if there’s a safe way to secure this kind of loan. Could it be attached to the property as a legal charge? Would that be too costly or complicated? I’m worried my relative may not make the best decision here and might just do it without documentation.

Any ideas or advice on how to make this safer?

2

Commenting here is limited to forum members with enough points. Check the rules for more info.

3

Quickest way to ruin family ties? Lend them money.

4

Jesse said:
Quickest way to ruin family ties? Lend them money.

Been there, done that. Lent my brother money and now we don’t talk. Family isn’t the same since.

5

Ash said:

Jesse said:
Quickest way to ruin family ties? Lend them money.

Been there, done that. Lent my brother money and now we don’t talk. Family isn’t the same since.

It’s not the loan, it’s what he did with it.

6

Ash said:

Jesse said:
Quickest way to ruin family ties? Lend them money.

Been there, done that. Lent my brother money and now we don’t talk. Family isn’t the same since.

Would you consider forgiving him to fix things?

7

@Larkin
Funny thing is, he’s the one holding a grudge! I tried to invite him to my wedding, but he ignored it. Long story short, he promised to pay but didn’t, and lawyers got involved. Mom eventually evened things out, but he still resents me. Lending that money just caused harm, and I don’t want someone like that in my life.

8

@Larkin
Kind of a strange question, don’t you think?

9

Corey said:
@Larkin
Kind of a strange question, don’t you think?

Nah, it’s fine. Everyone has to learn. I tried to help but ended up complicating things. I think he’s just not the kind of person I want around. Help family, but know your limits.

10

@Ash
Thanks for sharing. I think everyone wants to learn from others. If you don’t mind me asking, was it a big amount? What would you say is the limit for family loans?

11

Larkin said:
@Ash
Thanks for sharing. I think everyone wants to learn from others. If you don’t mind me asking, was it a big amount? What would you say is the limit for family loans?

It was £25k. My takeaway: don’t lend to family. Consider any money you give family as a gift you might not get back.

12

@Ash
Got it. That’s a lot of money. Appreciate the advice.

13

Jesse said:
Quickest way to ruin family ties? Lend them money.

Think of it as a gift. If you get it back, awesome. If not, at least you helped.

14

Lyle said:

Jesse said:
Quickest way to ruin family ties? Lend them money.

Think of it as a gift. If you get it back, awesome. If not, at least you helped.

Exactly. Never lend more than you’re okay with losing. I mean, I’d lend a friend £20 without worry, but that’s my comfort zone.

15

Maybe she should get the money against her current property instead of asking an elderly relative.

16

Finley said:
Maybe she should get the money against her current property instead of asking an elderly relative.

I wondered that too, but she’s in her 70s and has no income. Getting a loan might be tough.

17

@Kai
That tells you right there - if she can’t get a loan, she might not be able to pay it back.

18

Finley said:
@Kai
That tells you right there - if she can’t get a loan, she might not be able to pay it back.

She claims she has money in her pension that she can’t touch till April due to taxes, but who knows if that’s true.

19

@Kai
Even if it’s true, she’ll probably spend it on merging the two properties, not on repaying.

20

@Kai
That pension story sounds like she’s trying to avoid extra taxes by deferring withdrawal till April. Seems a bit fishy if you ask me.