Parental loan w no non deductible debt implications?

A "friend" has the following scenario:
- 2 IP's,
- no PPOR (living at partners house for minimal rent),
- both IP's on P&I repayments, but one IP's offsets IO rate has a IO split ~80k (20k offsetting this atm)
- Parents have 60k in a savings account they have offered as an interest free loan to top up this IO split and minimise interest (high 4's on the IO split).

Are there any tax or legal obligations to consider for the investor or the parents?
What about if the investor was to repay the parents say 3% interest?

 

Yes and yes
yes

 

/ would anyone like to share their experiences with similar scenarios or what might be some talking points to discuss with a solicitor?

 

What happens if......sued, die, bankrupt, gambler, etc What about wills ?

 

the 4 disasters
a) bankruptcy
b) incapacity
c) death
d) divorce
of anyone in either family

and, in no particular order:
who should be the lender
who should be the borrower
interest rate
terms of any loan agreement
limitations act
documenting any loan agreement
forgiving loans at death?
penalty rates
assignment of debt
documentation and transactions
social security act effects
part iva itaa36
refinancing later
security for loan
alternatives

 

A lawyer should be consulted. Accountants who are registered tax agents could advise purely on tax issues which would only cover a small aspect of all the issues.