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Interest on family loans



Dave says:
19 November 2015 at 9:36

If I loan my child R150 000 and charge her 7,5% interest, would that be considered fair interest by SARS ( I will also donate R 100 000 to her in that same tax year), and the interest I earn (from the loan) would that fall into the R 23 800 interest exemption, and not actually be taxable?

TaxTim TaxTim says:
19 November 2015 at 11:06

Yes to all your questions, the interest rate is fair and you will be able to have an exempt portion of the interest earned.

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