Investors Turning to Loan Notes to Avoid Buy-to-Let Tax Crackdown

Posted: 18 October 2019

According to industry experts, property investors looking to avoid the buy-to-let tax crackdown are turning to loan notes.

 

Investors Turning to Loan Notes to Avoid Buy-to-Let Tax Crackdown
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By lending money to a developer, which is used to build a single project or multiple properties, the investor is repaid a contractual return.
 
Security is provided by way of a debenture over the developer’s net assets, which can be seized by a third-party regulated Trustee in the event that the issuer fails to meet the terms of the agreement.
 
Examples include a London commuter belt focused loan note offering returns of up to 18% per annum, or this national portfolio loan note specialising in Private Rented Sector developments starting from £25,000.
 
Ryan Murphy, Sales Director for PrinvestUK’s new Loan Notes Department, said “property loan notes offer an investment with a fixed exit, and as they often generate a higher return than traditional bricks-and-mortar, it’s no surprise investors are turning to them.”