My clients wish to give their daughter an interest free loan of €150000 to purchase a house. The loan is to be repaid by their daughter over a 25 year term ie €6000 per annum.
On the basis that the highest deposit interest rate that my clients could obtain at present is 0.75%, am I correct in computing that the annual gift on the “interest free” would be €1125?
They would also like to gift her €2250 each per annum, which keeps the annual gift from each parent below the €3000 annual exemption. Some of the loan repayments which the daughter makes to her parents might come from these gift amounts.
Would this arrangement be acceptable to Revenue?