Bridging and Probate Lending
Our lending facilities can help build a bridge to your dream home or guide you through challenging life events. Here are two examples which may instigate such a requirement.
A dream home… if only!
The UK housing market is somewhat depressed of late given the higher levels of stamp duty, concerns about whether prices are over inflated and due a correction, or how Brexit will impact demand and prices in the future.
However, what happens when that property you’ve always coveted or a house in your favourite village where people “never move” comes unexpectedly onto the market? Despite the condition of the current property market competition remains rife for certain properties and estate agents remain busy with properties and locations in sought after areas.
In the present market, vendors can afford to be selective when choosing a buyer and only entertain cash buyers or those who have already agreed a sale on their house. But what happens if you haven’t even considered putting your house on the market as this is such an unexpected opportunity and one you really don’t want to let pass you by. However you then have other questions to consider:
We can assist by giving you time to consider and then prepare, whether this is for your house sale and/or to discuss the managed liquidation of your investment portfolio to utilise relevant tax allowances. We can support clients in securing their “dream” home by engaging one of our lending specialists to review their financial position and structure a short-term bridging facility to help them to buy the property.
Such a loan can, dependent upon your circumstances, be secured against either your existing property and/or the new property or an investment portfolio managed by Brown Shipley, negating the need for you to crystallise tax and be out of the market.
The type of security available will influence both the cost of the debt and ancillary charges.
Any debt of this nature will be regulated and we will need to confirm certain facts around your income and expenditure to ensure the loan is both suitable and affordable. In certain circumstances, we could potentially consider “rolling up” the interest for a short period.
We can then move swiftly, helping to minimise costs and manage your tax position effectively. You will then be in a strong position to be a competitive purchaser and ultimately secure the house of your dreams!
Probate
It is not something many of us care to think about, the death of a relative or close friend, especially if you are the executor or beneficiary of the Will.
But regardless of what arrangements have been made, it can take anything from months to years for probate to be granted and the estate distributed in accordance with the Will.
This can cause problems for heirs during what is already a difficult and often stressful time. The HMRC usually requires inheritance tax to be paid six months after death before any distribution can be made. If the beneficiaries or the Estate haven’t sufficient liquid funds available this can be problematic.
At Brown Shipley we have the experience to support and help during this difficult time, offering a considered approach in line with the deceased’s wishes. Therefore as long as we managed the deceased’s investment portfolio, a possible solution is for us to organise a simple short-term loan facility to enable inheritance tax to be settled and assets distributed. Loan repayments would then be taken from these distributions.
We have dedicated lending specialists available in all offices, therefore do not hesitate to contact your usual adviser for further information.
Richard Stubbs
Head of Lending
