Barclays reports offshore growth

Amanda Jarvis

April 21, 2006

It attributed this to increasing numbers of people from overseas coming to the UK to live and work.

Offshore mortgages are a little understood and complex area, but can provide savings of as much as 40 per cent UK tax for those people who are eligible to use their offshore income to buy a home in the UK, therefore also representing an interesting growth market for advisers to consider.

The Sterling offshore mortgage is available as a variety of different products including a tracker rate at 0.65 per cent above the Barclays base rate.  Clients with an income in US Dollars, Euros, Japanese YEN, Swiss Francs and Hong Kong Dollars can also apply for the offshore mortgage in their relevant currency.  Rates vary accordingly.

An offshore mortgage may be ideal for someone:

– moving to the UK for a fixed period of time and planning to return to their home country in the future
– with offshore income and investments that they wish to use to pay the interest on their mortgage
– resident and working in the UK  but domiciled outside the UK for tax purposes

Pieter Van Rooyen, head of banking at Barclays International, said: “As the number of people of other nationalities working in the UK increases, offshore mortgages are becoming increasingly popular. However, the UK mortgage market has seen a significant shift in regulatory requirements and there are now additional responsibilities on lenders to ensure product, process, advice and documentation are 100 per cent compliant. This means that advising a client to domicile a mortgage offshore requires even more thought and care and has led some providers to withdraw from this business.  

“Based on feedback we’ve had from clients, it seems clear some have concerns about the advice they’ve received elsewhere. Even now there still appears to be a lot of confusion in the market-place about the regulatory and tax implications of this product.

“At Barclays, we have carefully reviewed our offshore mortgage offering. We are confident it meets the strict criteria and fully complies with UK tax and MCOB rules, so we are looking to expand in this area. To support IFAs and to make it easy for them to conduct offshore mortgage business, we have CeMAP-qualified teams available to provide additional help and guidance.”  

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