Equity release

Reaper

While having a go at High Plains Drifter (or whatever his name is today) I think you overlooked the useful link he posted. It seems many of these scheme are accidentally (!) about to get taxed.

Anybody thinking of taking one out ought to look back and click on his link.

margaretclare

Oh-oh.

I clicked on the link 'financial times they are a-changing' and read the article.

Quote from it: "The pre-owned assets legislation, announced in last year's pre-Budget statement, will introduce income tax bills for those who have set up schemes to remove the value of their homes from their estates but who continue to benefit from the assets by living there. The tax does not affect people using the other form of equity release, known as a lifetime mortgage, where there is no transfer of ownership."

The last sentence in this quoted para makes it clear that this will not affect us. Phew!!!! (relief).

There's a lot of discussion in the older people's forums along the lines of 'Mum and Dad don't want to have to sell their home to fund long-term residential care, they want to leave it to us, how about if they transfer ownership to us but continue to live in it...' and so on.

I had just worked out that the increase in age-related tax allowance as announced last Thursday would mean that I'll probably be outside the tax bracket, thank goodness! So I was a bit alarmed at the thought of having 'thousands' of back tax to pay. Fortunately, it doesn't seem to affect the type of scheme we're on because we haven't sold part of our home, just borrowed against it, and we're still the owners.

Margaret

Robert_Sterling_3

Thank you reaper for your kind remarks.
Most of my posts in the Financial Forums are serious.
Most of my posts in the MSE Arms are not.
But then nor are anyone elses there and almost everyone there changes their name for Christmas.
The function of the MSE arms is different from that of the financial forums.  It serves a different purpose.
As Shakespeare famously said "A rose by any other name would smell as sweet" or words to that effect.

Until the new year then ... High Plains Drifter.

MarkyMarkD

Useful comments, Margaret, and I share your attitude to those who want to benefit from their parents' money and not let their parents live off it in their old age!

(And, by the way, I'm not particularly old, and I'm far more likely to be on the receiving than the paying end of inheritance in the next 40 years or so).

There was a little time during which it appeared that some forms of equity release would be taxed but this has been sorted out now, as I understand it.

As for

The subject of numbers of posts is best discussed in the MSE Arms forum.
Posts are like coins. It is not how many you have that matters. It is the value,if any, of the posts themselves.

Never a truer word was spoken.

payless

looks like iain did not come back!

Whilst my reply was short , it did cover some important points

Setting up costs are high
Interest rates are higher than "normal mortgages"
( lenders / brookers finding new markets with higher profit margins ?)

Sometimes an arrangement whereby the "kids" help out the parents might suit better than a full blown "equity release"

Other cases a "normal" mortgage may suit , instead of having interest rolled up

- no single way is prefect - each to his own.