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Dear Graham, I have put a deposit on an off-plan property here and have the cash to pay the balance back home in Europe. Completion of the property is expected to be late next year but I am not that optimistic. As the cash is just sitting in my bank, is there anything else I could do with it that would get me a better deal?
You have a number of choices and the most obvious one is to put the money into a deposit account gaining interest.Aa You have a favourable exchange rate right now when you buy dirhams, so anticipating that the exchange rate is not so favourable when your property is completed, it could be a good idea to move the money now and have it on deposit here.
If you don't want to move your money here but still benefit from the favourable rate, you can actually arrange to fix the rate now for up to two years using a currency-trading company. The same company will also save you on costs when you do eventually exchange your money.Aa There is another option for your money and it can actually be invested for one year. I saw recently a scheme in US dollars, although most currencies are available, including dirhams, which gave a return of around ten per cent providing that none of the four markets it was tracking fell by more than 40 per cent. Looking at the state of the markets right now, a 40 per cent drop is a long way. It also had a guarantee with it.
One other thing to consider if you are paying cash for your property is doing it via an offshore company, as that will save you headaches in the future. There is a charge for this but if you eventually sell, the new buyers will not have to pay the Land Registry charges and you can pass these charges onto them.
A group of us are looking to buy property together as an investment. The group will involve a few UAE and UK residents. We're all a little concerned about what will happen if we start arguing later. Would we be right to assume that an offshore company is the best route?
The offshore route is likely to be involvedAa somewhere but I doubt it will be the whole solution.Aa Your UK residents are going to have to declare their offshore interests to the UK tax authorities, which will complicate things. Also, if you are considering buying multiple properties, you may be better off putting each property into its own offshore company. This is going to make disposal and transfer a lot easier.Aa You are going to need specialist help on this and we can recommend someone.
We recently went to see a financial advisor who made certain policy recommendations to us. One of them was to take out a critical illness policy, which we declined. My husband had a minor stroke and now we feel that the advisor should have made us take the policy. Can we hold him responsible?
A friend of mine was told by a garage that his brakes needed looking at. He ignored the recommendation and later had an accident because of the faulty brakes. Do you think he could successfully sue the garage? Of course not. The word that has been overlooked is 'advisor'. You were given advice and chose not to take it. Your advisor cannot make you take anything. All too often we know we should have something but are unwilling to pay for it.
Graham Wolverson is an Independent Financial Advisor with Holborn Assets Limited. Email him at: graham.wolverson@7days.ae
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