Tax Bridging Loan - Key Parameters 2026
| Parameter | Typical range | Notes |
|---|---|---|
| Loan amount | £10,000-£50,000,000 | Most SME tax cases: £25,000-£500,000. |
| Interest rate | 0.55%-1.50%/month | Standard tax cases: 0.65%-0.85%. Rate depends on LTV, property type, urgency. |
| Arrangement fee | 1%-2% of loan | Deducted from advance or rolled into loan. One-time charge. |
| Legal fees | £1,500-£3,000 (combined) | Borrower's solicitor + lender's solicitor. Fixed regardless of term. |
| Term | 1-24 months | Most tax bridges: 1-6 months. |
| Security | UK residential, commercial, or mixed-use property | Personal or business asset. Must be UK property. |
| LTV | Up to 75% (residential); up to 70% (commercial) | Lower LTV = lower rate. Sub-20% LTV can access 0.55%-0.60%/month. |
| Interest structure | Rolled (no monthly payments) or serviced (monthly) | Rolled is standard for tax bridges - no cashflow impact during the term. |
Indicative rates - August 2026. Rates change daily. Actual rate depends on LTV, security, credit profile, loan size, and exit strategy. Contact our team for a live rate comparison for your specific case. All rates sourced from lender product sheets and publicly available market data.
What determines your rate
Step 1 - Identify the tax and deadline: Know the exact amount, the HMRC deadline, any penalties already accrued, and whether TTP is a viable alternative. The urgency of the deadline determines the required completion timeline.
Step 2 - Identify available security: What property do you or the business own? What is its current value and any existing mortgage balance? The available equity (value minus mortgage) determines the maximum loan and the LTV - which drives the rate.
Step 3 - Identify the exit strategy: How will the bridge be repaid? Business cashflow, a property sale, a refinance, a tax refund, or another identifiable event. The clearer and more certain the exit, the lower the rate and the easier the approval.
Step 4 - Contact DBF for indicative terms: Call 0204 6211776 or contact us online. We provide indicative terms within 2 hours during business hours. A formal AIP follows within 24 hours. Entirely free, no obligation.
Step 5 - Application and completion: Formal application, RICS valuation (3-7 days), legal documentation (both sets of solicitors). Total timeline: 7-14 working days for standard cases. Urgent cases can be accelerated where parties cooperate.
Worked cost example
- IHT bridge - from enquiry to completion:
- Day 1: Solicitor contacts DBF. Estate IHT: £180,000. Property security: £550,000 (no mortgage). Indicative terms within 2 hours.
- Day 2: AIP issued. Rate 0.68%/month. Term 12 months. LTV 32.7%.
- Day 5: RICS valuation instructed.
- Day 10: Valuation confirmed. Application proceeds.
- Days 10-15: Legal documentation. Charge registered at Land Registry.
- Day 15: £180,000 funded to HMRC. IHT paid. Bridge running.
- BRIDGE COST: £14,700 interest (rolled, 12 months on £180,000 at 0.68%/month) + £2,700 fee (1.5%) + £2,500 legal = £19,900.
- HMRC INTEREST if IHT paid 3 months late: £180,000 × 7.75% × (90/365) = £3,441.
- HMRC INTEREST if paid 6 months late: £180,000 × 7.75% × (180/365) = £6,881.
- NET SAVING vs 3-month late: Bridge (£19,900) costs £16,459 more than HMRC interest. Bridge is for certainty and probate timeline - not pure interest saving.
- NET SAVING vs 12-month late: Bridge (£19,900) vs HMRC (£13,950/year). Bridge is comparable at 12+ months.
- KEY BENEFIT: Bridge enables probate on schedule. 15 working days from enquiry to HMRC payment. HMRC IHT deadline: 8 weeks (40 working days) - comfortable margin. (40 working days). Bridge completed in 15 working days. Comfortable margin.
Rate context and outlook
Tax bridging is one of the fastest-growing specialist finance categories in the UK. Rising tax liabilities (reduced CGT exempt amount, pension IHT changes, SDLT surcharges) combined with a more punitive HMRC penalty regime are driving demand. DBF has arranged tax bridging across all HMRC liability types and works with specialist lenders experienced in tax-related bridging for fastest completion.