9:22 AM, 8th October 2021, About 2 years ago 3
Hello fellow P118’s – I wonder, can anybody help with a thorny little problem that we have?
We need to refinance a modest (just over £500K) mortgage for a small office building that we own as a part of our pension. The current LTV is less than 60%.
Kicker #1 is that this loan is costing me LIBOR + 1.5% and I would be reluctant to increase this unless absolutely unavoidable. Are such terms even available these days for loans against commercial premises?
Kicker #2 is that the loan is to a BVI registered company and the usual response of banks so far is to (quite literally!) slam the phone down when advised of this. I never get to the point where I can explain that this company was setup as a part of a legitimate HMRC approved pension scheme and has always paid all of its UK taxes in accordance with the letter and the spirit of the law.
I need to raise a little more capital – maybe taking things up to around 70% LTV, but the main reason why I want to do this is to ditch the whole BVI thing which has become highly toxic in recent years and allow an orderly transfer of the asset to a fully onshore setting.
The BVI company itself became deliberately de facto UK domiciled a couple of years ago by dint of the appointment of a UK based director and it duly now operates as a UK company in the eyes of HMRC, but unfortunately, the banks seem unable to recognise any of this.
Why not approach the existing lender? Well, I have, several times, but they stopped doing commercial loans many years ago now and point-blank refuse to countenance anything that constitutes a change short of full redemption.
The current lender is a major UK building society that did full due diligence and clearly had no issues with a BVI company and the pension arrangements embodying it at the time, though this is really irrelevant information at this point. I have included it here simply to illustrate that this is not some kind of dodgy arrangement.
Is anybody able to help with this situation, please?
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