Deed of Debt Forgiveness – how a parent forgives a child debt

Deed of Debt Forgiveness Book Cover
  • Deed of Debt Forgiveness

  • $185 includes GST

How a Parent forgives a child debt

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.

Parent forgives a child debt

Forgiving a child debt

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.

Any Tax when a parent forgives debts?

Issues when a parent forgives a debt for ‘natural love and affection’:

  • does the parent get a deduction for the release of debt?
  • do the commercial debt forgiveness penalties apply to children?
  • any FBT when a parent forgives a debt owing by a child?

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.

Does the Deed of Debt Forgiveness between parents and children also work for other relationships?

This Deed of Debt Forgiveness of a Child’s Debt is when a child’s debt is forgiven by a parent.forgiving a child debt parent forgives childs debt

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.

Parent forgives a child debt

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]


23/03/2016

Deed of Debt Forgiveness – how a parent forgives a child debt

How a Parent forgives a child debt 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 […]