Gifting An Inheritance From Your Equity
Using a Lifetime Mortgage & Equity Release To Gift An Inheritance
Please see our guide & frequently asked questions below. You can also Calculate your available equity here
Are you considering gifting money from your home?
Over five million over 50s are expected to release wealth from their properties to help younger relatives, as house prices keep rising and the cost-of-living crisis bites. Research from financial services company OneFamily finds that almost half of over 50s considering equity release (48%) say that levelling the playing field and helping their families to buy a property is their key motive.
Frequently asked questions:
How Do I Use My Equity to Gift an Inheritance before death, can inheritance be released early?
A common method is to arrange a lifetime mortgage which can be used to raise your equity as a gift to family. This money can be used however you wish.
A popular trend is gifting an early inheritance to children whilst you can enjoy the mutual benefits. This can be used for a home deposit, for example.
Does equity release affect or reduce inheritance tax, or is equity release subject to inheritance tax?
Equity Release, when finally repaid from the proceeds of your home would reduce the size of your estate, which can reduce your inheritance tax bill as a result. Therefore equity release is not subject to inheritance tax.
Calculate your available equity here and request a free review of your options
What gifts can be made to avoid inheritance tax?
If you are releasing equity to gift money, this will be exempt from inheritance tax if you survive for 7 years thereafter, and if you do not derive any direct or indirect benefit back from the funds gifted.
However, if you die within 7 years of making the gift, it will be taken into account with the rest of your estate when calculating the tax. If you give more than £325,000 to a non-exempt beneficiary in your lifetime and you die between 3-7 years thereafter, “taper relief” can be applied to the tax payable on those gifts.
Since tax is potentially payable by the recipient of the gift, often seen as an unfair effect of the tax regime, careful thought is needed before making lifetime gifts in excess of £325,000. Married couples can pass on their £325,000 nil rate band upon death which will double the allowance to £650,000.
How can I release an early inheritance from my home to gift to my family?
A lifetime mortgage can be used to raise equity from your home. The equity can be used to gift an early inheritance.
Are equity release lifetime mortgages safe?
All UK equity release mortgage lenders are all fully regulated by the financial conduct authority (FCA).
We only source quotes from Equity Release Council Plans for your added peace of mind. The council are the industry trade body who provide several codes of conduct for your added security, including the essential guarantee you will never enter into negative equity.
Can I make repayments on an equity release mortgage?
Usually you can repay up to 10% of the amount borrowed within any 12 month period. This is on a flexible basis and completely voluntary.
How do I find the most suitable option for me?
Understanding your options and suitability is important to making the best decision for you.
We can put you in touch with an expert who will review and assist with this process.
You can also Calculate your available equity here
The specialist broker we put you in touch with operate a zero-pressure policy, and will answer all your questions to ensure you are fully informed with no commitment. They will discuss the best equity release mortgage with you and the alternative options to ensure suitability.
Do I have to sell my home?
The most common form of raising equity in the UK is a mortgage where you maintain 100% full home ownership for the rest of your life, or joint lives where applicable.
Importantly, you can still move home if you wish and repay or move the mortgage with you.
Can I use my equity for early Inheritance or for tax-planning?
An equity release mortgage can be used for estate planning purposes. When you request your quotes, we will put you in touch with an expert adviser to discuss this in more detail.
You can Calculate your available equity here
How Does A Lifetime Mortgage Work?
We can help explain how it works.
- A special mortgage (which is only repaid upon sale of the property) can be used to access the equity
- The ‘Seven Year Rule’ means you must survive for 7 years after the gift to avoid Inheritance tax
- The earlier you gift funds the better, bearing In mind The 7 year rule noted above
- Wealth preservation is very Important. People are planning ahead to distribute this wealth.
We search the Lifetime Mortgage market & source advice via a qualified, expert adviser.
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The benefits of gifting cash by utilising the wealth in your home can be used to distribute funds to your family. This can also form part of your inheritance tax plan for the future.
If you make a gift and survive for 7 years or more, the gift can be tax-free, making this gesture a popular method of distributing and preserving your hard-earned wealth.
Gifting an early inheritance can be done via special mortgages which give you the power to safely unlock tax-free equity from your home. Repayments are optional and home ownership is retained for life.
The mortgages are arranged on a lifetime basis, repayable upon death. This provides a safe way to access your property wealth now without having to move home, although you still can if you wish.
If you are considering enjoying the benefits of raising money from your home, we can compare options from all providers and put you in touch with an expert adviser who can provide guidance on your options.
Request your quotes and we will provide you with expert information and personalised illustrations on all your options
Have any questions? Get in touch with an expert
We can save you money with exclusive plans through our independent equity release advisers who have highly rated equity release reviews across the industry
Gifting Money To Family Members
Gifting an early inheritance cash gift can provide many benefits to you and your family and is a popular way of accessing your hard earned money to enjoy with your family whilst you can all enjoy the benefits. We provide a comparison service of the plans available to help you acheive this.
Request A Call Back From An Expert
We put you in touch with a qualified expert who will explain how the lifetime mortgages work, and they will also search the entire market for your best possible deal.
You will receive detailed written illustrations to make an informed decision and to discuss with your family. There’s no obligation to proceed and no upfront costs payable.
Many over 55s are gifting cash to family members. Use our quotation service to access interest rates and providers.
Gift an early inheritance from your home to your family, either for a home deposit or for any other purpose.
Cash Gifting can provide many advantages for you and your family
Request a quote on gifting an inheritance and our expert advisers will help you find the correct solution for your personal needs.
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