The Isle of Man-based lender’s tracker is designed to increase the number of borrowers taking advantage of the tax-saving benefits of offshore mortgages. Such advantages apply to UK residents with dual or overseas nationality and expats, who can potentially reduce or eliminate Capital Gains Tax, Inheritance Tax and higher rate Income Tax on net rental income.
The buy-to-let tracker is at Bank of England Base Rate plus 0.65% for 65% LTVs and 0.75% for 75% LTVs until June 2007. This is in addition to the existing 0.99% discounted tracker for 85% LTVs. With buy-to-let, rent cover is calculated on the actual rate taken, with a minimum rental interest cover of 125%.
Philip Murray, Managing Director at Irish Permanent International, said: “There are a significant number of people in the UK who, because they have a foreign passport, dual nationality or are UK expats, can potentially take advantage of offshore structures and mortgages. With these products they can benefit from a competitive tracker and, at the same time, reduce dramatically their tax liabilities. UK expats can also obtain an offshore mortgage in their individual name.”
There is a 5% redemption penalty during the discounted term of the tracker, but no extended tie-ins. For the 0.65% and 0.75% discounted products, 20% of the original loan can be paid off per annum without penalty. The buy-to-let tracker is available to Expat individuals, offshore limited companies and trusts. The uncapped procuration fee is 0.5% on the discounted products.
