Inheritance Tax And Equity Release – Part 1

How does Equity Release affect Inheritance Tax, particularly in light of the forecast changes to Inheritance Tax brining in the value of pensions after 6 April 2027?

This article should not be considered as bespoke legal advice suitable to you and your circumstances. It also does not remove the need to seek appropriate financial advice from a suitably qualified professional operating in Equity Release mortgages.

Inheritance Tax (IHT) is calculated on the size of your estate on death. Releasing equity in your home could, therefore, reduce the value of your property and lead to either less IHT being payable by reason of your death, or your estate may fall underneath the threshold completely so that no IHT is payable. In both cases, the equity release funds released must be spent and not retained in any form. As with any form of financial planning or Will making, you ought to consider the wider impact that the proposal has on your estate and in particular your