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Mark Gregory, Founder and CEO at Equity Release Supermarket
www.equityreleasesupermarket.com
Tel: 0800 802 1051
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Question
Can I give some of my equity to a family member?
I have a mortgage-free maisonette and wanted to find out if it is possible to release some equity from it to pass onto my grandchildren?
It makes sense to see them enjoy some of their inheritance. I’m retired but do have a good pension.
Answer
Thank you for your question, and the simple answer is yes, it is possible to release equity from your home and make a financial gift and transfer some of your wealth to your family.
Here at Equity Release Supermarket, we have seen many customers gift money to loved ones at a time when they most need capital, and the customers get a huge amount of satisfaction from seeing their family benefit in their lifetime.
There are many options with Equity Release including a Home Reversion Plan, flexible Lifetime mortgage or a Retirement Interest only mortgage (RIO), and our specialist advisers will discuss the best option for you.
For example, a Lifetime mortgage is often used to provide a ‘living inheritance’ to pass wealth down to the next generation, because the plan includes many flexible features that can be tailored to your requirements.
One note of caution is that once the capital has been gifted, you would not be able to use the wealth for your own benefit in the future, including paying for long-term care.
Our expert advisers will be able to answer any questions you may have regarding the gift to your grandchildren and furthermore, depending on your circumstances, they may recommend that you talk to an inheritance tax specialist.
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Question
Which provider should I choose?
I am currently looking into equity release because I would like to do some home improvements, but who do I choose?
I see lots of adverts on the TV, Age Partnership and Key for example, but what should I be looking for in an adviser? I am a year away from retiring and do have an excellent company pension.
Answer
I am often asked this question, and I always reply by informing customers when they are considering any financial product, it is important to ensure the company is authorised and regulated by the Financial Conduct Authority (FCA).
Secondly, I strongly recommend that a customer should seek whole of market, independent financial advice with no bias or allegiance with any individual company.
Thirdly, when considering equity release, it is important that a company and their advisers are members of a trade body that set high standards including advisers should be highly professional, act with integrity and transparency in offering products and services to customers
Here at Equity Release Supermarket, we are authorised and regulated by the FCA, and we are a fully independent advisory firm with access to the whole of the equity release market.
We are also proud members of the Equity Release Council who are the trade body that set robust standards in our industry.
Our expert advisers are on hand to answer any questions you may have, and because you are a year away from retiring, it is sensible to start making plans, and take your time to ensure all your options for a long and prosperous retirement are considered.
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Question
Can I move properties after taking out equity release?
I have decided to move house, but have taken out equity on my current home, is this possible?
I would like to downsize because my home is too big for me now, and I want something that is easier to manage in the long term.
Answer
As you have taken equity release on your current home, I recommend that you undertake a full review of your existing plan and your current situation with an expert adviser.
This is because providers of equity release have flexible features and some include downsizing protection, or if you move home and want to transfer your plan to your new home, you may be able to do so if the new property meets the providers lending conditions, and this could help you avoid early repayment charges.
Due to the array of different plans and features, with your permission, and to better understand your options, here at Equity Release Supermarket one of our expert advisers could contact your provider on your behalf.
They could then gain access to the options and features that may be available to you, including downsizing, or transferring your plan, and then they can advise you on the best course of action for your circumstances.
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Question
Do I have to pay tax?
I have a very quick question regarding equity release? How much tax do I need to pay on the money released and how do you calculate the amount of tax due?
Answer
Thank you for your question and I can confirm that equity released from your main residence will not raise a capital gains tax or income tax liability.
However, if the money raised is placed in a bank or building society account for any length of time, you may be subject to income tax on any interest paid.
Please note that taking out equity release may effect your eligibility for welfare benefits and one of our expert advisers can provide you with more information.
Further information is available from HM Revenue and Customs, The Benefits Agency, or another source such as the Citizens Advice Bureau.
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