Mortgage on investment property to pay tax bill

Area
Swansea
Capital Raised
£290K

If you come to us asking for one type of property finance, that doesn't mean we won't propose an alternative solution if it could work better for you. 

The Scenario

This is the nightmare scenario no-one want to find themselves in.

Bad advice from an accountant lands you with a belated £250K tax bill. And months of legal wrangling rack up a further £40K in legal fees. (Because no-one’s going to hand over a quarter of a million quid to HMRC without putting up a fight.)

Our professional landlord client came to us with a payment deadline now only four weeks away.

The limited company the tax was charged against had been liquidated.  

The asset he could raise funds against was held by another limited company: an unencumbered semi-commercial property in Swansea (ground-floor restaurant with flats on the 1st and 2nd floors above), valued at £550K.

He came to us with 3-4 weeks to pay HMRC, looking for bridging finance secured against the investment property, to be repaid by a mortgage.

The Solution

At last some good news for the client.

As soon as we presented him with some indicative loan terms and got discussions underway, HMRC had confidence that he was actively pursuing finance and came back with a deadline extension.

Now with three months before payment was due, we changed tack to source a mortgage straight away, bypassing bridge finance.

For many potential lenders a company liquidation in the background, and funds being used to pay a tax bill, are red flags. They could indicate a client who’s sailing close to the wind.

We identified a lender who was prepared to consider this use for the funds, presenting our client to them as the victim of poor advice rather than a willful tax-avoider.

The rate offered wasn’t rock-bottom, because of the limited field of lenders, but our client was very happy with the 20-year mortgage term, and the finance was in place for him in plenty of time to meet the tax payment date.

Read our blog about business loan finance »

Mathew Phillips

Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need.

Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements.

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