Alternative property refinancing arrangements
The measure
The Government is considering changes for alternative property refinance arrangements that do not include payment of interest (often referred to as Islamic financing) so that they have the equivalent tax treatment to conventional loans.
Who will be affected?
Individuals and businesses who wish to enter into non-interest financing arrangements and providers of such finance, eg banks.
When?
No timescale has been set.
Our view
This is a welcome proposal and builds on a number of legislative changes since 2005 to encourage the growth of Islamic financing by removing potential tax distortions.
