How bridging loans work
Bridging loans offer short term finance for situations where there is a gap in funding. This usually happens when a client is waiting for a property sale or other deal to go through and unlock capital, or where an alternate form of funding, such as a mortgage, will be used eventually but cannot be accessed fast enough.
Bridging loans are usually offered over 12 months or less and tend to come with relatively high interest rates. For this reason, it is essential to have a repayment plan worked out before taking out this type of loan.
Why use a bridging loan to pay inheritance tax?
For many people, their main inheritance is likely to be in the form of property. This means that to pay the inheritance tax owed to the government, the property will need to be sold. However, there are times when it is not possible, or advantageous, to sell an inherited property immediately.
This could include where a family member is still living in the property or where the property could benefit from significant renovation to boost the sale price.
Legally, inheritors have 6 months (from the end of the month when the person leaving the inheritance died) to pay the inheritance tax. A bridging loan offers a way to pay the inheritance tax bill and give inheritors time to dispose of the property as they see fit, without worrying about overrunning this time limit.
Find the best rates on bridging loans for inheritance tax
Although bridging loans are only intended as short term finance, it is still a good idea to shop around for the best interest rates. This is especially true as the interest rates on bridging finance tend to be relatively high, so getting the best possible deal can make a significant difference to how much you end up repaying.
Fair Loans’ experienced professional bridging loans brokers have access to leading lenders from across the market, including many not available on the high street. This means we can offer the very best rates available on short term finance quickly and efficiently, taking the stress out of the process.
To find out more, simply fill out the contact form above or call Fair Loans today on 0117 313 6058.