I wonder if somone can advise me on the tax implications (income tax and possibly inhereitence tax) of the following;
As part of my divorce agreement I loaned my ex wife about £50,000 to enable her to have a larger house. The agreement says that interest at
1% over base will be payable once the youngest child reaches 21. The loan is registered as a charge on the house. (We were both advised independently by solicitors at the time).The youngest child is coming up to 21.
I propose to informally waive the interest. She will pay nothing, although the debt will stand and the charge will remain on the house.
1) How would the tax authorities view this? Would I be liable for income tax on the interest even if I don't receive it? WOuld it could as a gift from me to her and thus have inheritance tax implications?2) Should I ask a solicitor to arrange the waiver or is it enough for me to write to her and say that I waive it?
thank you,
Robert