My mother loaned me £25,000 to help purchase a property. She did not want any interest in the property and so her name is XXXXX XXXXX the deeds. She did not want the loan repaid as she said it would be part of my inheritance and she did not want any interest to be paid for the same reason. I drew up an agreement of the terms of the loan and both my mother and I signed it. This was done so that it could be placed with my mother's will which is in the possession of my brother-in-law who is the named executor, in order that he would know that my sister was entitled to £25,000 more than me.

However, he has told my mother that he thinks that this is illegal and that interest and tax on the loan will have to be paid as it is the law. I know that transactions such as company cars and loans to employees by employers are now, and have been for some years, classed as benefits-in-kind and the employee has to pay tax. Does this apply to my situation. My brother-in-law has no legal expertise. If it does, what rate of interest should be used - the rate applicable at the time the loan was made or the rate applicable when I inherit?

I look forward to hearing from you and thank you for your assistance.

Optional Information:
System of Law: England-and-Wales