Jargon Buster
A B C D E F G H I J K L M N O P Q R S T U AllInheritance Tax Planning
Inheritance Tax is now a major problem for an increasing number of people as house prices continue to rise. Under the current tax regime, the first £300,000 of your estate is zero rated for Inheritance Tax but any remainder is taxed at 40%. Using Equity Release to mitigate Inheritance Tax can be an effective estate-planning tool.
No providers currently offer "back to back" arrangements, but ALL plans remove part or all
of the value of the property from the estate. The benefit released can be channelled into
an investment vehicle written under trust for beneficiaries.
Alternatively, the equity released can be used immediately, which is an advantage of using Equity Release for Inheritance Tax planning over some other methods.
A solicitor and/or IFA who specialises in Equity Release will be able to advise you on how to avoid Inheritance Tax.
Insurance
Most plan providers require you to insure the property or pay the buildings insurance premiums, for the value agreed at the outset of the Equity Release plan.
Interest Only Roll Up Mortgages
If you are elderly, then special Equity Release mortgages are available.
These are interest-only roll up mortgages with "no negative equity' guarantees, if offered by SHIP members.
The amount of capital released is determined by your age, with older people able to release most of the equity in their properties.
This site is for UK residents only
