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Tax Free Equity Release
31/08/2010
Equity release is a method to enable homeowners aged over 55 years to release money from the equity they have in their homes. This is a very good way to increase retirement income and will be a great help if pensions and savings are not enough for a comfortable retirement.
Tax related benefits in a plan like this are well worth looking at. Tax breaks can be enjoyed by the homeowners and their heirs.
The biggest tax benefit being, any lump sum from an equity release plan is tax free as it is releasing money from a primary residence which does not attract taxation under UK Law.
If the option that allows drawdown of equity as and when needed is taken, the money received is still considered to be tax free. It may also be possible to take an initial lump sum and have a facility for further draw downs at a later stage which would also be tax free.
Heirs could benefit by a reduction in the amount of inheritance tax to pay. There will be no inheritance tax on the amount that is borrowed against the property and if the remaining equity falls below the IHT threshold, it may even be possible to mitigate IHT all together. This may prove a great benefit after significant house price increases over the last 10 years.
Homeowners aged over 55 years who would like to know how much money the value of their property could release can find out by contacting therightequityrelease.co.uk for equity release advice.
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