20% p.a. return guaranteed by mansion developers?

dunstonh

opinions4u wrote: »

Loving Dunstonh and the straight bat approach!

If I typed what I really thought then I think it would be longer than a fortnight off this time.

bigadaj

Might not be that bad, it woud, presumably be mainly asterisks!

jimjames

As per my signature I wouldn't even touch it with a virtual bargepole.

Why would any company offer 40% guaranteed when the maximum available anywhere else is 90% less?

Any guarantee is only as good as the person guaranteeing it - a company that may not be here in 12 months is a worthless guarantor so any guarantee should be taken with a very big pinch of salt.

jamesd

Hausmarg wrote: »

A friend of mine was approached by a salesman for a property development company called Stonehaven Group offering a bond with a guaranteed return of around 40% in two years time if he invested a six-figure sum today.

Why bother with such a deal when at least one VCT offers expected dividends in the 8-9% range, equivalent to about 15% for a higher rate tax payer? The premium for the extra risk doesn't seem worthwhile compared to dealing with established UK generalist VCTs. 30% of the money invested in a VCT is returned very quickly by HMRC, when it pays the 30% tax relief, which is capped at no more than the actual income tax paid in the year.

So lets see: speculative40% in two years foreign property scheme vs almost immediate 30% from HMRC then 8-9% tax free a year for as long as the investment is held, a minimum of five years to keep the 30%. Seems like a really obvious and easy choice to me: VCT wins hands down.

If your friend has the money to do this he might also be a suitable person to be using EIS or SEIS investing in very small companies, with even better tax relief.

Hausmarg

The company seems to develop properties exclusively in London and the South East.The sales rep claimed to have sold his own London flat in order to invest in this bond and to have persuaded family members to do similarly.A desparate way to make quota but he beleives his own bullsh*t!

dryhat

Companies like this are generally run by liars and thieves and are best avoided.