There are many reasons why more and more people in Spain decide to resort to a loan of money between family members to finance the purchase of a property, mainly derived from the fact of being able to agree on more beneficial conditions, reducing the cost and with advantages in the return periods or guarantees.
First of all, you have to know how to differentiate between a loan and a donation, which are distinguished in that in the first case the money will be returned and in the second, it will not, as it will be given without any compensation. Therefore, Loaning money between family members must be formalized through a contract in which the basic conditions appear along with the commitment to return, the way in which it will be carried out and the deadlines.
This contract, where the characteristics, obligations and rights of the loan will appear, is essential so that it is not identified as a donation, thus being able to clarify the different exchanges of money, both the delivery of capital and its periodic return if requested by the the Tax Agency.
In this sense, and contrary to what is usually believed, There is no obligation to charge interest on a money loan between family membersalthough this must be reflected in the contract.
How to declare a loan between family members
Lending money between family members must be subject to a contract and appear as Onerous Asset Transfer (TPO). Once the procedure is completed, the credit will have to be declared, even if it does not generate any type of payment. This TPO has a tax from which it will not be exempt and which must be paid by the recipient of the money, within a period of one month from the moment of signing the contract.
This is necessary, since any delivery of an asset or right with consideration, whether bonds, loans, leases, real rights, administrative concessions or pensions, are understood as variations in assets of the natural or legal person, and must be communicated.
The recipient of the money in the loan between family members will have to present the model 600 to the Treasurywhile the person who made the loan, if it entails a charge of interest, these (never the returned capital) must be taxed as a return on movable capital: at 19% the returns of up to 6,000 euros, at 21% between 6,000 and 50,000 euros, and 23% the returns above 50,000 euros.
Although the constitution of the loan does not imply any payment, it will be necessary to present the aforementioned mandatory self-assessment form 600, a subject operation, but exempt from taxation. Thus, the borrower must present it to the Tax Administration of his autonomous community, since it is a regional tax. You will only have to present it to the Tax Agency if you reside outside of Spain. The deadline for submitting form 600 is one month from the signing of the loan.
