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Fiduciam loan allows client to settle HMRC debt

11 February 2020

Fiduciam has put in place a £973,000 loan to refinance a varied portfolio of seven properties, held across nine titles, after the borrower was hit with a large, unexpected, tax bill.

Previous poor advice had resulted in the borrower, an experienced operator of pubs and restaurants, purchasing various properties under the wrong legal entity, leaving him liable for an HMRC demand in excess of £350,000.

Due to the varied nature of the portfolio, which includes an owner-occupied commercial unit, a restaurant and bars, other lenders were unwilling to offer terms. The borrower’s ongoing position in relation to HMRC was also a significant barrier.

Fiduciam specialises in complex cases of this nature particularly around business lending. Fiduciam’s flexible approach, combined with its understanding of the client’s business position, enabled it to offer a two-year facility to allow the client to restructure his portfolio, settle the tax position and increase both turnover and profit of his trading businesses. Although the legal process was inevitably complicated, all parties worked together to deliver a solution for the client so that he could respond to HMRC’s demands in a timely manner.

The 62% LTV loan was offered on a retained-interest basis for the first three months, and serviced thereafter, at a rate of 0.8% pcm.

Commenting on the deal, Chris Parr, business development manager at Fiduciam’s Manchester office, said: “The client needed us to move quickly in order to be able to meet his tax bill promptly. Although the nature of his portfolio meant that a complicated legal process was involved, we worked with the broker to keep the deal moving and provide the finance he needed. Our experience of handling complex deals enabled us to take on the client’s case when other lenders were unable to consider it.”

Adele Turton, Co-founder of Sirius Property Finance, added “We approached Fidiciam, having taken advice from accountants and tax advisers, with a client looking to restructure his property portfolio and deal with an outstanding tax matter. Fidiciam quickly understood every aspect and were able to facilitate matters efficiently. The process was smooth and proactive and the lender’s solicitors were extremely helpful and knowledgeable when advising on requirements as well as creating workable solutions throughout.

“My confidence in Fiduciam as a partner, when dealing with transactions most lenders would not have attempted or even considered, is very high.”