Expats take on Rothschild over equity release schemes

A Spanish lawyer has taken legal action against ten banks, including British bank Rothschild, for their funding of equity release schemes that have left hundreds of British pensioners at risk of losing their homes in Spain.

It represents a test case for at least 800 British pensioners across France, Spain and Portugal who bought into equity release schemes in the belief that by remortgaging their properties and allowing the money to be invested offshore, their children's inheritance tax liability would be mitigated while they would receive a lump sum and a regular investment return to cover the new mortgage. ...
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While Guernsey-based NM Rothschild & Sons accepts it provided loans to a number of pensioners to fund the remortgaging of their homes and the investment in offshore funds, it has distanced itself from the advisors who brokered the equity release schemes.

A spokesman for Rothschild said: “Rothschild is confident that the Spanish courts will agree that there has been no wrongdoing on its part in relation to allegations being made against a number of banks by a lawyer in Spain.

"Whilst Rothschild has previously provided loans to a number of Spanish property owners its role was as a lender only. The bank had no part in providing investment or tax advice to borrowers. The borrowers were advised by their IFAs in Spain, who received no commission from the bank.”