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PBR: Equity release planners welcome IHT changes

Equity release planners have welcomed the Chancellor’s proposed changes to the inheritance tax threshold.

Mortgage Portfolio Services mortgage and equity release planner Simon Chalk says: “At present, many couple have to establish the ownership of their principal residence on a tenants-in-common basis in conjunction with a Will Trust in order to avoid losing one nil rate band on first death, thus their beneficiaries paying an unnecessary £120,000 tax bill.”

He says the problem for equity release planners was that providers are reluctant to accept a property subject to a trust, particularly if equity release is sought after the first death.

The new proposals remove the need to use the main residence for IHT mitigation making it easier to effect equity release.

But he says: “Net estates over £600,000 may still find it worthwhile considering such planning. In spite of this improvement, equity release providers need to overcome their reluctance and start accepting properties under trust as they are losing out on a sizeable part of the market and frustrating our efforts to help clients meet their needs.”


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Tax allowances and exemptions

Helen O’Hagan, Technical Manager at Prudential, looks into the planning strategies that can deliver considerable tax savings for your clients. Inheritance tax (IHT) Consider Margaret, featured on our Planning Matters family hub, who is a sprightly eighty year old with four children and several grandchildren. She’s recently been widowed and IHT planning is high on […]


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