Inheritance Tax And Equity Release – Part 2

In part 1, we discussed what Equity Release is and how it can be teamed with Inheritance Tax planning to reduce the Inheritance Tax payable upon death. Click here to read part 1.

Equity Release and Gifting

Equity Release coupled with gifting can effectively decrease the amount of Inheritance Tax payable by beneficiaries. That becomes even more critical when an asset class which was previously outside the Inheritance Tax net (your pension) will be brought into the tax net for Inheritance Tax calculation purposes on death should you die after 6 April 2027.

Gifting has always been a powerful method for reducing Inheritance Tax liabilities especially when it is more likely than not that the donor will outlive the Revenue's seven-year rule. This may mean, that if one is already elderly or one has already poor health that the impact upon the recipients of you not surviving seven years or not even surviving three years should be considered.