United Kingdom Promissory Note
Also known as: Loan Note · IOU
Generate a promissory note tailored to United Kingdom law. Our AI incorporates United Kingdom-specific statutory requirements, disclosure obligations, and legal standards into every clause.
Promissory Note
Also called: Loan Note, IOU
Legal Requirements
United Kingdom Legal Requirements
Key United Kingdom statutes and obligations that apply to your promissory note.
Governed by the Bills of Exchange Act 1882 in the UK
Must contain: unconditional promise to pay, specific sum, name of payee, and maker's signature
No formal stamp duty on promissory notes since Finance Act 1971 abolished ad valorem duty on loan instruments
Interest clauses should state: rate, whether simple or compound, and calculation method
Consumer credit promissory notes may be regulated by the Consumer Credit Act 1974 (credit above £25,000 triggers CCA)
Written confirmation of loan terms aids enforceability and prevents disputes over repayment terms
Restrictions & Key Considerations
Interest rate must not be unconscionable — extremely high rates risk challenge under the Consumer Credit Act 1974 or common law
Limitation period to sue on a promissory note is 6 years from date of default (Limitation Act 1980)
A note payable on demand triggers the limitation period when demand is made
Bearer notes are negotiable instruments — whoever holds them can claim payment
FAQ
United Kingdom Promissory Note FAQ
Common questions about the promissory note under United Kingdom law.
Is a promissory note legally enforceable in the UK?
Yes. A promissory note that meets the requirements of the Bills of Exchange Act 1882 is a negotiable instrument and legally enforceable. The creditor can sue in the county court or High Court for the outstanding amount plus interest.
Does a UK promissory note need to be witnessed?
Witnessing is not legally required for a promissory note, but it is good practice. A signed, dated note is generally enforceable. For larger sums, independent legal advice and formal execution (as a deed if secured) is recommended.
How long do I have to enforce a UK promissory note?
The limitation period is 6 years from the date the cause of action arose (i.e., the date of default or demand) under the Limitation Act 1980. After 6 years, the debt becomes 'statute-barred' and cannot be enforced in court.
Does a promissory note attract stamp duty in the UK?
No. Stamp duty on promissory notes and loan instruments was abolished by the Finance Act 1971. There is no stamp duty payable on a standard UK promissory note.
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Promissory Note by Country
Laws vary significantly by country. Find the right form for your jurisdiction.
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