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    • hw68
    • By hw68 11th Aug 17, 6:13 PM
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    hw68
    Equity Release Loan
    • #1
    • 11th Aug 17, 6:13 PM
    Equity Release Loan 11th Aug 17 at 6:13 PM
    We are thinking of offering parents an "equity release" loan, i.e. a lump sumto be paid back with interest out of their estate, before inheritances come into effect. Does this have any tax implications? Would it be paid as a debt before inheritance tax becomes due. Any advice would be gratefully received.
Page 1
    • xylophone
    • By xylophone 11th Aug 17, 6:54 PM
    • 22,432 Posts
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    xylophone
    • #2
    • 11th Aug 17, 6:54 PM
    • #2
    • 11th Aug 17, 6:54 PM
    You could make your parents a loan - you could take a first charge on their house.

    If the house needed to be sold to fund care costs, then the loan (plus interest if rolled up) would have to be repaid before the cash could be used for care.

    If the loan is not repaid until after the second death, then it and the rolled up interest would be a debt to be repaid from the estate.

    If the interest is rolled up there could be a high tax charge when you eventually receive it.

    Take legal advice.
    Last edited by xylophone; 11-08-2017 at 6:57 PM.
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