With the general political and moral arguments surrounding the use of legal tax mitigation schemes intensifying (Jimmy Carr, stamp duty mitigation etc) it is no surprise that lenders are tightening their stance and refusing to lend when these schemes are disclosed.
When applying for a mortgage it is vitally important that you don’t try to hide the tax planning that you are using, non disclosure is never a good idea when asking for a financial product. But, with the high street lenders applying a blanket ban when schemes like employee remuneration trusts are in play – what should you do if you need to raise a mortgage?
We have always been very good at arranging finance in these circumstances (if the tax planning is legitimate!) and we have seen them used extensively among IT contractors, business owners and bankers.
The approach we take now is to consider your whole asset base – your main residence, buy to let properties, cash and other liquid assets together with the composition of the actual remuneration trust. With this information, and a full understanding of how your tax planning is structured and your income (actual and taxable) we approach a handful of our banks who are comfortable and experienced enough to handle complex structures and we will work to find a solution to your requirement.
As a guide, you should expect to pay slightly more interest than usual (this is balanced by your reduced tax payable – so bear that in mind!). We can however still arrange terms on interest only, high loan to value and for very large mortgages.
If you would like to discuss your options our advisers are happy to speak when you are.