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Offshore loans give greater protection

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FOR many Hong Kong people, buying in London or other parts of Britain is often just an investment.

The main purpose of the investment is to pay off the mortgage of a residence they may eventually live in but, most likely, it is method for providing the highest rental-return yield possible.

Since Britain is often not an investor's principal residence, it is important to take advantage of all the financial breaks or opportunities available to them so as not to be ravaged by the country's tax system.

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Andrew Eden, of Ernest Maude Continental Investment, the Hong Kong representative for Woolwich Guernsey - Britain's third-largest building society - said as an offshore resident it was always important to explore all options for protection.

'The beauty of having a [offshore] British loan is that it can be offset. The interest rates can be offset against the rental income for tax purposes - so it's fairly important to make sure you're doing everything for what's called a qualifying loan,' he said.

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But tax is not the only reason that people take offshore mortgages as it will also give the client use of a wide range of services from offshore phone banking, high-yield accounts and electronic banking services.

Without a doubt, Mr Eden said the first step for potential British property buyers was to open a sterling account to make mortgage payments.

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