Equity release allows homeowners aged 55 and over to unlock some of the value tied up in their property without having to move. The most common form, a lifetime mortgage, lets you borrow against your home and receive the money as a lump sum.
Benefits of Gifting Equity Release Funds
Using equity release to support family members financially can help with significant life expenses like university fees, wedding costs, or a first home deposit. This flexibility allows you to provide assistance when it’s most needed, rather than waiting until after you pass away.
Risks and Considerations
Gifting money through equity release reduces the amount of inheritance you can leave, and might affect your ability to claim means-tested benefits. It’s also important to ensure you won’t need the funds for your future expenses, such as healthcare or holidays.
Protections and Guarantees
Most equity release providers offer a “no negative equity guarantee,” ensuring you or your estate won’t owe more than the property’s sale value, even if it doesn’t fully cover the loan.
Tax Implications
Money released through equity release is tax-free. If you gift this money and live for at least seven years afterward, the gift is free from inheritance tax. If you pass away within seven years, the recipient may have to pay inheritance tax, depending on the estate’s value.
Expert Advice
It’s essential to get regulated financial advice to understand if equity release is right for you and how it fits into your financial plan. Our advisors at Equity Release and Mortgage Bureau can guide you through the process, ensuring you make informed decisions.
For more information, contact us for a free consultation and explore how equity release can help you support your family financially.
