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Equity Release & Lifetime Mortgages

We’ve all heard the old saying that the only two certainties in life are ‘death and taxes’ – unfortunately when it comes to inheritance tax these two are combined.

Many people feel uncomfortable discussing such things, but doing so with a financial adviser can help ensure you maximise the amount you leave to your children and grandchildren – surely worth any discomfort.

Any individual’s inheritance over £325,000 is subject to tax (doubling for married couples), but there are ways this can be reduced such as the new residence allowance, lifetime gifts, trusts, lifetime mortgages, pension drawdowns, business property relief and life assurance.

As an example, lifetime mortgages (also known as equity release) can be used to finance gifts such as clearing the mortgage of a child or funding a grandchild’s first home deposit. As long as the individual lives for at least another 7 years then they avoid inheritance tax on that money later on.