Tempted by the offer of a salary for life and an inheritance tax reduction, organisers of Equity Release Victims Association, Ian Sherdley, 69, and Euan Armstrong, 73, used their Spanish holiday homes as collateral to buy into the equity release schemes. The schemes were sold by independent financial advisors working the expat communities along the Costa del Sol on behalf of Denmark's biggest bank Danske Bank and Nordea Bank SA. They were told that if they took out full mortgages against the value of their Andalucian homes, which were fully paid for, and then gave the money to the bank to invest, their inheritance tax liability would be reduced and they'd receive a small lump sum, as well as a monthly return on the bank's investment which would cover the cost of the remortgage and provide a small salary. Mr Sherdley, from Lancashire, and Mr Armstrong, from Scotland, followed the advice only to be later told by their Nordic Banks that the investments had gone badly, the remortgaged money had been lost and their homes, with a combined value of €4.5 million, suddenly belonged to the banks. It is thought that there could be hundred of expats in similar positions across Spain and France. A Spanish court has so far suspended the banks' foreclosure and repossession orders on the properties, while a decision as to how the cases will proceed is expected in the near future. According to Mr Armstrong's lawyer, Antonio Flores from Lawbird Legal Services, the schemes were mis-sold, bearing in mind it is illegal to knowingly indebt yourself in order to reduce your inheritance tax liability. He said: "We want to find out exactly how many of the schemes were sold, to who, and on what basis. "As far as I can gather, retired expats were targeted because they had paid off their mortgages, so could use them as collateral and would be tempted by talk of reduced inheritance tax liability." Mr Armstrong added: "We encourage everyone who, like us has been sold one of these schemes to get in touch. "Do not lie down and take this. These banks are making billions every year with your money." A spokesman for Nordea bank said: "We can't comment, but we can say is that Nordea runs its business in compliance with local laws." A spokesman for Danske Bank said: "According to the law we cannot comment on individual customer cases nor questions related to individual customer cases. We have no comment."
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