|
TaxTim says: 27 October 2013 at 22:45 Do you have a formal agreement in place with your mother regarding the payment of interest and what percentage does she charge you? |
|
Black Coffee says: 28 October 2013 at 5:43 We do not have a written agreement in place however we did agree to it verbally. I pay her the rate of interest that the bank charges her = prime - 0.95% |
|
|
TaxTim says: 28 October 2013 at 13:26 You will be able to deduct the interest, you should draw up a verbal agreement, however then she will have to include the interest in her income and be taxed accordingly. Depending on her age though she will have exemptions on the interest. |
|
|
Black Coffee says: 28 October 2013 at 14:13 Thank you! I appreciate your advice. |
|
|
TaxTim says: 28 October 2013 at 14:14 Only a pleasure! |
