A client faced an urgent 28-day deadline to settle an international tax bill from a property sale in Germany. We secured a £500,000 bridging loan by utilising two properties as security, allowing the client to meet the liability on time without facing penalties.
The Challenge
The client faced several critical hurdles in securing the required borrowing:
- Urgent Timeframe: The client needed to quickly remortgage to release equity in the UK and transfer funds overseas within 28 days.
- Complex Purpose: The loan was required to settle an overseas tax liability, a purpose that many mainstream lenders decline.
- Valuation Constraints: Traditional property assessments would take too long, jeopardising the tight deadline.
The Strategy
To structure a deal that met the client’s needs, we leveraged our network of specialist bridging lenders:
- Specialist Lender Alignment: We approached a bridging lender comfortable with international tax obligations and short-term timescales.
- Automated Valuation Models (AVMs): To avoid the delays of a physical valuation, we utilised lenders capable of using AVMs across both properties (Windsor and Reading), eliminating additional fees and delays.
- Short-Term Bridge Structure: We secured a 6-month bridging loan of £500,000 with a clear refinancing strategy planned for maturity.
The Results
- Total Loan Amount: £500,000
- Combined Property Value: £1,650,000
- Loan-to-Value (LTV): 30.3%
- Capital Raised: £500,000
- Mortgage Structure: 6-month bridging loan
- Key Outcome: The tax bill was paid on time, avoiding penalties and protecting the client’s asset base.
Why This Matters
When facing unexpected tax liabilities, having access to fast capital is vital. This strategy allowed the client to meet their short-term obligations using a high LTV mortgage alternative, leaving them in a strong position to eventually raise capital for property investment or refinance under more favourable, long-term terms, like an interest-only mortgage in the UK.
Speak to a Specialist
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