Purchase of a large family home for a Dubai tax resident
The Requirement
Our client was buying a multi-million pound London property from his mother-in-law at a price below the market value. The difference between the purchase price and the actual value would create instant equity, serving as his sole deposit. The property had only 38 years remaining on the lease – significantly below the minimum acceptable length for most lenders – but the seller preferred not to extend it while she still owned the property.
Our client, a private equity professional and tax resident of the UAE, was not subject to income tax and earned the majority of his income through bonuses. The remainder of his income was derived from overseas trusts.
The Solution
We agreed with the client to commission a full report of his overseas trust-based income from a large and reputable accountancy firm, who were able to provide satisfactory detail for a lender. Leveraging our standing with lenders who understand large and overseas income, we secured a mortgage with a UK private bank who could base affordability on untaxed income, bonuses and overseas trust distributions.
We presented the bank with a proposal for an below-market purchase, which reflected the short lease, and they agreed to raise a mortgage against the lower figure. And on the condition that our client would extend the lease to a satisfactory length post-purchase, the bank were able to use property’s supposed full market value to create a deposit out of the difference.
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