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• Savings & Investments
• Retirement Planning
• Wealth Preservation
• Tax Planning
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• IHT/Equity Release
• Will Writing Service

IHT/Equity Release

Pass it on or use it now?

Inheritance Tax (IHT) is now becoming applicable to many people in the United Kingdom and applies to the ownership of their worldwide assets, to include their main residence.

IHT applies on an individuals assets exceeding £312,000.00 (tax year 2008/09) at a rate of 40%, anything below this figure is known as the "nil rate band". Many parents wish to pass on their wealth to their children and grandchildren but are not happy that the government may claim tax on the value above the "nil rate band" and so an efficient strategy to either reduce or remove this tax can be very valuable for the beneficiaries.

It is very important that when reviewing the opportunities to reduce taxable estates you receive the right professional independent financial advice.

Many elderly/retired people who manage on a small pension and limited savings are also living in properties that have soared in value over the recent years and may not be aware of the true value of their home. They may have a need to increase their monthly income to cover rising costs or raise a cash sum for say a holiday or home improvements or even the need to assist in the payment of "long term care" but think they have no means of doing so.

Equity Release plans (also called lifetime mortgages or home income plans) are a way of releasing a cash sum against the value of their home with the debt normally being repaid from the sale proceeds of the property after their death. There are many variations on the terms of these lifetime mortgages so it is important that you seek independent financial advice to make sure you get the right one to match your needs.

Another Equity Release scheme is called a "home reversion plan" this plan differs from the schemes above as you actively sell all or a percentage of your property to a home reversion company. These types of plans tend to lend a higher amount than the other equity release schemes, and can be very useful for people who have a commercial property as their main residence e.g. a bed & breakfast.

Both of the above Equity Release schemes can also be used for effective IHT planning but as above it is important to receive the right independent financial advice when deciding which way is best for you.

Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured upon it.