Tax benefit?

[Investedmum]

If someone were to use their parents money (6 figures) to buy something and then repay that money from their own savings in a couple of years, how would that be a tax benefit?

A family member is doing this and we are being told it is because it is a tax benefit over the long term?!

Is the reason you can’t just ask them? If they’re happy to talk 6 figure spending, savings and tax reasons with you, why so shy to just ask?

One way you could save tax - if the people repaying had to take money from a pension fund to repay. Large withdrawal would mean a large tax bill. Withdrawing in smaller amounts each year, and then using the total to pay back the loan, would save income tax 🤷🏻‍♀️

It’s not being repaid from a pension as far as I know, it would be from ISAs. It’s hard to ask them now, as the information has been given to us in bits and pieces over the last few months and has actually caused a bit of a rift. Inheritance tax was mentioned at one point, but surely that wouldn’t work if the money was repaid?

What are they buying? Property? Any use of government incentives?

Yes, it's a second property, abroad.

Oops name change fail !