Charging below market interest gets you in trouble with the taxman or the law against money-lending.
“Neither a borrower nor a lender be”.
This advice by Polonius, the King's adviser to his son in Shakespeare's Hamlet remains good advice today.
But good advice, it is said, is least heeded when most needed.
Lending money gives rise to risk of default, a stark reminder of today's global phenomenon.
At a personal level, it can lead to the loss of a friend, a relative remaining one only by virtue of blood ties.
The term “relative” is defined in our tax law to include a wide network of family members including a nephew, a niece, a cousin and somewhat incredibly “an ancestor or lineal descendant.”
How the latter is to be determined, the law has not made clear, leaving the conundrum perhaps to the wisdom of the courts.
