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CASE STUDIES
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Carbon reaffirms expertise with residential portfolio restructure
Carbon were instructed in the autumn of 2016 to structure the refinancing of a 28 unit residential property portfolio valued close to £13mil. The client was looking to incorporate the portfolio into a limited company to mitigate the imminent changes to income tax when property is held in personal names. The clients wished to raise the LTV to 55% on a primarily interest only basis with a very shallow repayment profile. This requirement was achieved as was a gross interest rate of less than 3%.
This particular portfolio was held in 7 individual family members names so the circumstances involved in such a refinance were particularly complex.
Coordinating 7 individual parties to comply with and conform to the necessary process and paperwork required the diligent and focused support of our administrative team.
Couple this with the fact there was a timeline to work towards, as a number of the units had lease extension requirements due to short leases and had to be simultaneously completed. This was to satisfy the Lender and meet the Freeholders terms of lease extension.
The case was completed in the timescale required and the clients objectives were met in their entirety.
This particular portfolio was held in 7 individual family members names so the circumstances involved in such a refinance were particularly complex.
Coordinating 7 individual parties to comply with and conform to the necessary process and paperwork required the diligent and focused support of our administrative team.
Couple this with the fact there was a timeline to work towards, as a number of the units had lease extension requirements due to short leases and had to be simultaneously completed. This was to satisfy the Lender and meet the Freeholders terms of lease extension.
The case was completed in the timescale required and the clients objectives were met in their entirety.
Carbon complete residential portfolio restructure
Our client held over 70 properties in various ownership structures that he was looking to incorporate into one Ltd company to mitigate against income tax given recent taxation changes. The value of the portfolio was more than £26mil.
The deal needed to be done simultaneously and required HMRC sign off to validate the tax efficiency. Without this consent and same day transfer the client was liable for stamp duty and capital gains tax.
Having researched the market, we identified a solution whereby the bank was happy to accept the transfer of all properties into the new entity on the agreed terms set out by HMRC. The all in gross interest rate was below 3% on a 5-year interest only facility at over 50% LTV.
The logistics of getting all the properties valued and the legal process working in tandem required an incredible amount of organisation especially as there were 2 banks involved in the transaction.
The whole transaction took place in little over 3 months from initial meetings to the loans being drawn. With the first bank/client meeting taking place on 19th July and the loan drawing on 26th Oct.
The deal needed to be done simultaneously and required HMRC sign off to validate the tax efficiency. Without this consent and same day transfer the client was liable for stamp duty and capital gains tax.
Having researched the market, we identified a solution whereby the bank was happy to accept the transfer of all properties into the new entity on the agreed terms set out by HMRC. The all in gross interest rate was below 3% on a 5-year interest only facility at over 50% LTV.
The logistics of getting all the properties valued and the legal process working in tandem required an incredible amount of organisation especially as there were 2 banks involved in the transaction.
The whole transaction took place in little over 3 months from initial meetings to the loans being drawn. With the first bank/client meeting taking place on 19th July and the loan drawing on 26th Oct.