Equity release being used to 'provide children with financial support'

Equity release is increasingly being used as a means for parents to provide financial support to families, it has been claimed.

Speaking to the Financial Times, managing director of equity release specialists Home & Capital Advisers Nigel Hare-Scott said: "By making use of a lifetime mortgage or a home-reversion plan, wealth can be passed down to children but – more commonly these days – to grandchildren to help them get on the housing ladder."

Equity release is also an attractive means of getting the most value from inheritance tax.

However, the government was recently urged to reform its inheritance tax rules, which it claims are unfairly hitting elderly widows and widowers whose partners died before March 1972.

The tax quirk excludes them from the transferable nil rate band introduced in 2007, enabling the surviving partner to receive nearly double the amount tied up in the value of their property when their partner dies.

Equity release in the UK from Ashall Glover Financial Services