Did you lend your child some money? But now you want to formally forgive the debt?
A parent forgives a child debt by building a Deed of Debt Forgiveness. In the Deed of Debt Forgiveness, the parent forgives the child’s debt for ‘natural love and affection’. The debt has gone. The Borrower (your child) no longer owes the lender (you, the parent) any money.
You loan your daughter $30,000 each of the 5 years she is at University. She owes you $150,000. You are happy with her hard work and want to forgive the debt. This has CGT, income tax and stamp duty implications. Instead, you forgive the debt by building this Deed of Debt Forgiveness. There are now no tax issues when forgiving the debt.
Issues when a parent forgives a debt for ‘natural love and affection’:
The answer to all questions is generally ‘no’. Press the Sample button above to read our letter of advice when a parent forgives a debt owed by a child.
This Deed of Debt Forgiveness of a Child’s Debt is when a child’s debt is forgiven by a parent.
For other Deeds of Debt Forgiveness:
Telephone us for free help building your Deed of Debt Forgiveness for debts owing by a child to a parent.
Adj Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
National Australian law firm
Mobile: 0477 796 959
National: 1800 141 612
Email: [email protected]