Would you charge a partner interest?

[Mitsky]

Interested in views! I will be lending my husband money for a purchase related to a business he’s starting up. We’ve been through the business plan, I’ll be paid back in 3 months. I have no concerns about that at all.

However, I said to him in passing that I’d be an idiot not to benefit from this transaction and proposed that I’m paid a minimal amount of interest (far lower than a bank), which he was quite surprised by!

Am I being a money grabbing monster?

I wouldn't charge a loved one interest, no.

Hes your husband! Surely him starting up his own business benefits you! I definitely couldn't charge my husband interest- it is a bit money grabby

No. But is there a backstory? Is he a feckless type, unlikely to actually give a fuck if he couldn't return the money to you?

How much money? In general, I wouldn’t charge interest, though if yours is in a high-interest paying account and it’s a lot of money, I can see why you might.

No, but I also wouldn’t lend money in this situation.

Nope he’s a dream. Been freelance for 20 years and very good with money.

turns out I’m a monster, will give him the money freely!

Although this is also true, I currently get 5% on where it’s sitting in savings so technically I’ll be losing money.

He’s your husband! Why on earth would you charge him interest?

Yes you are being a money grabbing monster who in there right mind would charge their husband interest

It is money grabby to want to charge your own husband interest yes. The fact you’re married means legally any money is equally as much his as yours, just like this business and any money it makes is equally yours as it is his.

No, I wouldn’t charge my spouse interest.

Is this a joke?

Yeah, sorry, that's grabby. I couldn't do that.

I can't believe your first thought to him needing help is how you could cash in on it. Especially when it's only 3 months so not like you're losing years of interest payments. If the seces were reversed people would be calling you all sorts and calling for your partner to leave

Is the interest on the loan tax deductible for the business? If it were then yes, I’d charge interest. If DH and I had individual finances and it were a personal loan obviously I’d not charge interest, but if there was a perk to charging interest for a business loan that worked in our favour I’d do it, if there’s no business perk for it and it would actually cost him additional monies then no I wouldn’t.

Who benefits if the business idea is a success and his income increases? If it means he'll put more into the family pot, don't charge him interest, you get your payback that way.

If your finances are separate and his success just means more spending money for him, then yes, you should be compensated for the loss of interest, although it won't be a huge amount of money - eg if you leant him £10k for 3 months, the interest lost would be about £170.

It's better not to lend it to him if you'll feel like this. If I were him, I'd talk to a bank. Your attitude sounds like you'd keep reminding him forever about how generous you'd been.

Ok I get it!

I won’t be charging him interest, in my head I had decoupled it from a relationship and it’s a business transaction because I’m lending it to his business not to him.

The income from his business won’t add more to our family finances.

I know you all think I’m awful, I promise he doesn’t feel that way! I have my tail between my legs.

It does rather depend on how you organise your family finances. If you keep your own money separate from each other and this is purely a business deal then I think you could charge interest. He would be borrowing at a lower rate and you would be compensated for your loss of interest.

However, if he is in trouble and the bank wouldn't lend then I would not charge interest but also I would have to be prepared to lose my loan and probably wouldn't enter into any such agreement.

I have lent both of my son's money and would never dream of charging them interest even though I've lost interest by taking some of my savings out to help them. I'm lending DH money ATM he will repay in September when he officially retires and gets his lump sum. I think it's mean to charge family interest.

It’s a good corporate tax dodge to charge interest on a business loan 🤨

I would charge it. That means he can repay you with a bit extra and that bit extra would be deducted from the revenues, resulting in lower profit and lower corporation tax due.

As a couple, you’d both benefit.

I was going to say that I was very confused assuming that you live together. As surely you're investing into the household pot. I'm also confused why you wouldn't own the business together. Are your finances completely separate? Then when you said it wouldn't add much to the pot I thought that's not really a business and if it's a business that doesn't make money it's a hobby. I wouldn't lend my wife loads of money for an expensive hobby as we don't have lots to spare. If I did lend it then I wouldn't change interest. If we were looking at her starting a business it would be a family business and I wouldn't want paying back if it was viable

If you have told me that I would have told you to stuck your money where the sun doesn’t shine (unless he is a tight arse that splits all expenses 50/50 with meticulous precision)

No I wouldn't dream of asking for interest

We don't have his and hers money. We have our money and we share.

So I wouldn't be lending in the first place because we would be investing in this together.