All you need to know about the non-interest bearing loan between individuals. We see the laws that regulate this form of financing that can happen for example between family and relatives but also between friends, so as to avoid problems with the Inland Revenue. Finally we will provide you with a similar facet of the contract, the model of private writing to follow.
Non-interest-bearing loan between individuals: financing conditions and the risks involved
An alternative solution to the classic personal loans offered by banks, which allows us to obtain the money we need at often better conditions is that of private loans. In particular situations, typically in the case in which the exchange of money takes place between relatives, it may happen that the loan granted is non-interest bearing. This means that the one who offers the sum of money to the receiver does not want to obtain any gain from it. This is the case, for example, of a father who lends a part of his savings to a child, so as to allow him to buy a house, or at least reduce the amount of money to be borrowed from a bank to which we will then have to carry out the reimbursement including all interests. So that of the family loan is undoubtedly the best solution to save money and to have more freedom in returning the amount received.
When we are in the position to receive the money we need on loan from a relative ready to help us, we must however take precautions to avoid problems with the Inland Revenue. Does this mean that the non-interest bearing loan is illegal and that in order to receive a loan, do we necessarily have to contact an authorized credit institution? Absolutely not! One of our family members, if they have the availability and are happy to help us, have every right to use their money as they believe, and therefore also to offer it on loan without demanding the payment of interest. The problem related to this form of financing arises when checks are carried out by the Revenue Agency. The latter, as you well know, is responsible for verifying that there are no undeclared incomes, which constitute a loss of money for the coffers of the State.
The instrument used by the Inland Revenue to carry out all the necessary checks is the so-called Redditometer. This compares, for each citizen, the income received annually with the expenses made. For example, a citizen who receives 1,000 euros a month is unlikely to buy a house without going to a bank. In the example of the child who receives a non-interest bearing loan from his father, this can instead take place. If the Inland Revenue registers this anomaly it may proceed with a more thorough check of the citizen, because it is possible that the latter will receive income “in black”. For this reason, the greatest risk to be met in these cases is that of having to pay all taxes due for the Idfr, to which the penalties for late payment must be added. All this happens, as we have said, in case we are accused of perceiving a salary without declaring it.
In our example, however, we have not talked about any income received but only of a loan received from their father. So why should I risk a penalty if the interest-bearing loan is a completely legal practice? Simply because, if we have not had the right precautions, it will be difficult to prove that the money that is being challenged has been really lent to us by our father. In fact, it is easy for those who really perceive a certain income without declaring it, in case of control by the Inland Revenue, to use the same “excuse” as our own. Whoever conducts a check, if we can not prove in any way that we have received a non-interest bearing loan from a family member will be forced to sanction us. Risking with this form of loan is not only who receives the sum of money, but also the one who offers it. Loans can also be made between individuals by setting a certain interest rate, provided that everything is declared and that the interest rate complies with the parameters allowed by law. In the case of the non-interest-bearing loan, the Inland Revenue could think of a failure to declare the income tax on the interest income, and therefore in our example could sanction the father who lent the money to his son.
Non-interesting loan between family and relatives, how to avoid penalties: make similar contract and private writing
Probably these first paragraphs will have frightened you, and you may have already thought about turning to a bank to avoid any kind of problem, both for you and for your relatives available to offer financing. Obviously it was not our intention to scare you, but only to warn you of any dangers arising from this form of financing. In any case we confirm what was said at the beginning of the article, namely that the non-interest bearing loan is the ideal solution for anyone who needs a certain amount of money and is lucky enough to have a relative available to offer it without demanding any interest. So let’s see what are the precautions that we must have to prove where the sum we received on loan comes from, also emphasizing that no interest has been set, so as to avoid any kind of sanction both for us and for the family member who offers financing.
The first thing we need to do to prove that it is a non-interest bearing loan is to make a real contract with a relative who offers us his money on loan. The contract will be very similar to the one that binds us to the bank when we apply for a personal loan. If you intend to receive an interest-free loan from one of your relatives, what you need to do to make your agreement effective and avoid any kind of problem with the Tax Office is to follow the fake model that you find below, printing it and inserting it in the spaces left white your personal data, and then specify the date. Obviously the contract will have to be signed by both the lender (the one who gives the loan) and the borrower (the one who receives the loan).
As we can see in the private writing above (which will be printed two copies, one for the lender and one for the borrower), it is necessary first to insert in the appropriate spaces the personal data of both parties, in addition to specify the relationship. As is also the case for loans offered by banks, the contract defines the expiration date, ie the date by which the repayment of the sum loaned must be completed, even if, as specified in point 4, early repayment is permitted at any time.. In point 3, the expenditure that the borrower has to face with the money borrowed from the lender must be specified. Finally, very important is point 5 of the contract, which states that the loan is non-interest bearing, “not even to the extent of legal interest”.
How to prove the “certain date” of the contract for non-interest bearing loans
So the contract certifies that the money with which we have made the expense that caused doubts to the Inland Revenue has been given to us by a relative, and that the loan is non-interest bearing, and therefore does not provide for interest. How to demonstrate, however, that the date specified in the contract is the actual date in which it was signed? In other words, a person who receives control from the Inland Revenue, to avoid sanctions, could sign this contract, specifying a date prior to the date in which the expenditure that triggered the Redditometer alarm was recorded. For this reason, despite having regularly signed the contract, we could still find the same problems described above.
So let’s see how you can demonstrate the so-called ” certain date ” of the contract and then be able to finally sleep peacefully. The first solution is to register private writing at the Inland Revenue. In this case it will be necessary to pay the relative registration tax, which will be equal to a percentage of the amount received on loan. The second possibility is that of the so-called ” recommended without envelope “. To do this you will need to fold the contract the three equal parts, and close it with the stapler, precisely without an envelope. It will be enough for us to go to a post office and send a copy of the writing to ourselves, and in the same way one to the address of our relative who gave us the non-interest-bearing loan.
Two further possibilities are computerized ones, and therefore to be done directly from home using the computer. The first solution is to use Certified Electronic Mail ( PEC ). Obviously in this case both will have to have a PEC e-mail address, and it will be necessary to copy the text of the contract in the message to be sent, instead of sending it as an attachment, for which the PEC does not offer legal proof as it does for the text of the message. Finally, the last solution is to sign the contract via digital signature, which will have to possess both the lender and the borrower.
Non-interest-bearing loan not returned: what to do?
We have therefore seen how the non-interest bearing loan and the main features work. Following the instructions given in the previous paragraphs, you can receive or offer a non-interest bearing loan to a relative or a dear friend. Usually, just considering the fact that it is an interest-free loan, this type of loan is granted only when there is a very strong link between the two parties. However, there may be problems with repayment: what to do if the borrower does not complete the repayment?
In this case it is even more important to have entered into a private writing such as the one we have previously reported. If between the borrower and the grantor there is a contract signed by both that certifies the non-interest bearing loan, then the lender of the loan can in any case claim the total repayment of the sum of money lent. You will need to contact a judge and sue the beneficiary of the non-interest-bearing loan, in order to get the money not returned. In the event that the loan was paid without any official document then it will be very difficult to prove that the transfer of money was a non-interest bearing loan and not just a gift. This is why we repeat once again the importance of private writing.
Non-interest-bearing loan to the child: how to make the transaction between father and son
One of the main reasons for choosing the type of financing as the non-interest bearing loan is without doubt the case in which a father lends a certain sum of money to his child. The idea that would come to mind for many would be to agree privately without defining private writing, since a simple handshake is more than necessary to define an agreement between father and son. From the point of view of trust this is true, however it is not enough in case of control by the Inland Revenue.
Before making the transaction between father and son for the non-interest bearing loan that you want to grant, it is necessary to formalize the agreement. The methods to be used are the same as we have seen previously, and therefore the private writing and the application of the certain date, while in the case of particularly large amounts it will be necessary to go to a notary and formalize the agreement before two witnesses. Regarding the transaction, the methods of transferring money can be chosen according to your preferences and obviously also based on the amount. For small amounts you can choose to pay cash, otherwise you can make the transaction by bank transfer or by check.
Bank transfer for non-interest bearing loan: causal and other measures
As we said then the non-interest bearing loan can be paid by bank transfer. So let’s see what measures you need to have to be 100% in good standing and avoid any kind of penalty. In the reason it is necessary to specify the date on which the agreement was made before a notary, in the event that it is a rather high sum of money. In the case in which a private writing has been defined, it will be necessary to specify the date of the same.
Therefore in the causal must be reported “Non-interest bearing of the dd / mm / yyyy”. Among the measures to make the transfer of money even more transparent there may be to specify the motivation for which the loan was offered. In particular it can be specified “by marriage”, “for payment studies”, etc. The most important trick is to always specify the date on which the agreement was defined. A generic motive such as “Loan” or “Non-Interesting Loan” could make the Inland Revenue look suspicious, which might think of a way to hide the payment of a work service from the Tax Office, or the transfer of suspicious money.