Jon Golding evaluates the use of equity release to reduce the IHT charge on death.
There are many types of equity release, the main ones being lifetime mortgages and home reversion plans, which release cash lump sums. Both of these are regulated by the Financial Conduct Authority (FCA) and the Equity Release Council.
Background
By using an equity release type product, a homeowner can draw a lump sum or regular smaller sums from the value of their home, while remaining in their home.
In the past, equity release had a bad reputation due to forceful salespersons signing up retired house owners by extolling the advantages but downplaying the disadvantages. The salesperson’s suggestions of financial disadvantages were less than opaque, so organisations such as SHIP (now the replacement Equity Release Council) were set up with the
