Millionaire homeowners turning to equity release to protect cash

An increasing number of wealthy homeowners are taking equity out of their property as they seek to protect their money from the taxman and help their loved ones. There was a 66% increase in the number of people using equity release on homes valued at £1m or more in the first half of this year than in the first six months of 2020, according to Legal & General Home Finance. There is increasing evidence that older property owners whose homes have gone up in value dramatically over decades are deciding to tap in to that wealth to pass on to younger generations. Inheritance rules say that you can make financial gifts tax-free so long as you live for seven years after making them. Giving away money can also reduce the value of your estate, making it less likely your loved ones will have to pay inheritance tax. Any money owed on equity release is also taken into consideration when assessing potential care costs, so it could reduce the overall bill a family may face. Stevie Heafford from the accountancy firm HW Fisher said the housing boom and the pandemic were leading more people to consider inheritance planning. 

The Sunday Times (19/09/2021)