Gift and Loan Agreements Between Family Members

16th February 2022

An article in the Sunday Times on 30th January highlighted some of the problems that can arise with gifts or loans between family members and buying a property.

In the particular case discussed in the article, a couple married and the husband’s father lent his son £250,000 as a deposit for the couple to purchase a property.

The couple bought the property but tragically, the husband died young and unexpectedly.  His father then requested the loan to be repaid and it transpired that the widow had never been aware that what she thought of as a gift to herself and her late husband was in actual fact a loan and had to be repaid.

Whilst this case is undoubtedly very sad and, in some ways, specific on its facts, it does highlight some of the risks involved in financial arrangements within families, the importance of openness between all parties and ensuring that all documentation is drawn up and available.

For example, parents lending money or gifting money will want to have this recorded and could well be concerned about potential divorces in the future.  Equally those receiving money need to think about things like life assurance and their own wills and possible pre- or post-nuptial agreements to ensure that they have the legal framework in place to cope with unexpected problems that can sadly arise.

Colman Coyle has considerable experience in advising in relation to life time gifts and the purchase of property as well as the preparation of wills and related areas and if you would like to discuss the issues raised here, please contact Patrick Green on +44 (0)20 7354 3000 or

Patrick Green

Patrick Green

Senior Associate