What are the factors used by courts to determine whether payments by parents to their married children should be considered loans or gifts?
British Columbia, Canada
The following excerpt is from Kuo v. Chu, 2008 BCSC 504 (CanLII):
Some of the factors to be considered in determining whether payments by parents to their married children should be considered loans or gifts were set out in Locke v. Locke, 2000 BCSC 1300 at para. 20: Factors considered by the courts in these cases include: 1. whether there were any contemporaneous documents evidencing a loan; 2. whether the manner for repayment is specified; 3. whether there is security held for the loan; 4. whether there are advances to one child and not others, or advances of unequal amounts to various children; 5. whether there has been any demand for payment before the separation of the parties; 6. whether there has been any partial repayment; and 7. whether there was any expectation, or likelihood, of repayment.
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