Equity release enables you to access a portion of the funds tied up in your property now without having to move or sell your home.
You are free to do whatever you want with the cash, meaning you can share it with your loved ones whilst you’re still here, instead of leaving them with an enormous inheritance tax bill- they will only be taxed on the remaining portion of your home.
With equity release schemes you can either borrow money against the value of your home (known as a lifetime mortgage), or sell part of your home at a reduced market rate, but remain living there throughout your life (a home reversion scheme).
According to Which?*, the money you release can be passed onto your heirs and, providing you survive the gift by seven years, there will be no tax to pay. You are free to do as you please with the money.
The loan is recovered only when the property is sold, in the event of death, or if you have moved into long-term care.