Q on inheritance tax

I would imagine the DV wouldn't bother unless there is a material discrepancy.

Why do you think 50% will go to spouses?Less than 50% of people are married, not all of those will leave to a spouse,and also many will be people already widowed.

Its also quite difficult and expensive to take the equity out, lots of people got into trouble with that about 15-20 years ago ISTR, and its also problematic even if you try and pass lumps of it off to relatives, many tax rules about what you can and cant do. And when many houses are worth 250K or above (isnt the average 220k??) then thats a high proportion.

I can think of a village I know, (which there must be many examples of elsewhere in the SofEngland), with houses pretty much all are worth at least

200k, many with single retired people living in them (due to death of a partner). Most of those will be hit by IHT unless they jump through some pretty complex hoops)

according to the govt leaflet, you shouldt agree anything until probate is granted, since it can take some time. Anyway, in english house purchasing, people can drop out pretty much anytime.

OK about 47% percent then.

This IS the other 50% (now 53%).

Simply borrow against it, or trade down, or sell and move into rented.

That may be the average house price. It isn't the average figure for equity.

I can't see that the hoops are complex, they go to the bank and borrow some money.

I really do think that you are overestimating the percentage of the population that dies owing a fully paid off house worth

275K.

tim

"hello, I'm aged 78, on retirement benefit,and I'd like to borrow 100k. F&^% off" And how would they repay it even if they got one? This is someone retired we are talking about. Let the interest accumulate? Those type of plans got into very poor repute a few years back when people aged 80&90 ended up owing more than their house was worth.

I'm sure its extremely variable and location dependent, but where I live nr reading, and many places I know further south, (full of retired people in bungalows and houses), its going to be very high. Modest 2 and 3 bed houses and bungalows that 10 years ago were 100k and paid off are now worth 300k, people couldnt trade down without moving a substantial distance, away from friends and maybe relatives, a very bad idea in late retirement.

In message , Tumbleweed writes

Mo, it would be 'welcome'

Not now. They guarantee no negative equity and the interest rates are fixed so you know exactly how the interest will compound. This is a growing market and the FSA has specific rules to govern their sale.

OK thanks. What happens if you borrow an amount, say 20k, is that guaranteed so you'll never owe more than 20K, or the value of the house?

In message , Tumbleweed writes

Its 'no negative equity' so it means the value of the house. Some also guarantee a minimum equity. How could it be no more than £20k?

Oops, I should have said ' a guaranteed top limit'. So that does take me back to those news stories of the type; "little old lady borrowed 20k, now the company wants her house, and she cant leave anything to her children as the wicked capitalist company has stolen their inheritance".

Do you get a different interest rate depending upon the value of your house, or is the borrowing limited (more likely) to a percentage of the house value?

In message , Tumbleweed writes

Its age related. So the older you are the more you can borrow at the outset and one lender allows you to draw down monthly as well and this too is a function of the borrowers age. For joint borrowers it is the youngest age that is used.

John, what are these type of schemes called or could you point me at a URL? Might be useful for someone I know, at least worth checking into.

ISTM that it's the lack of a draw-down that made the previous schemes unsuitable (to the point where if there were such a test at the time, they would have been mis-sold).

Someone with a 300K asset looking to supplement their income does not need 100K as a lump-sum and IMHO selling them this is financially dishonest.

tim

In message , Tumbleweed writes

'Lifetime Mortgages' is the generic name given to them by the FSA and many providers call their product that too. Northern Rock are one of the providers

and there are many more. I post their URL not as recommendation but because theirs is a good example and they are the only one (AFAIAA) that offer the monthly drawdown facility. Hope this is of use.

Thanks JOhn.

In message , john boyle writes

That link is useless! Sorry. because Lifetime mortgages are now regulated i see that NRock arent giving details on their public site because they can only be provided by through an adviser.

Have a look at this instead :

How do you achieve that prior to probate?

In message , john boyle writes

Alternatively look here

The Safe Home Incomes Plans, many of the providers have signed up to them.

In message , " snipped-for-privacy@privacy.net" writes

Sadly (in my opinion) SHIP condones Home Reversion Plans as well, in which the OAPs house is sold, wholly or in part, to the Plan Provider and they then rent it back to the OAPs. I dont like those plans at all.

Same as after, by signing a binding contract.

Getting a buyer to agree to sign in those circumstances may not be easy, of course, but is hardly impossible.