Parents Helping Children

Parents, especially those over 55 years of age have seen property values hugely rise and their homes now are probably their biggest asset.

To help their children, parents have the choice of either selling their home to release cash, remortgage the property but then they have to think of the repayments they will be having to make when they are possibly considering retirement or they could just release the equity in their property. This would give them the ability to help their children get onto the property ladder. They may prefer to give them the money to start a business though of course this is the riskier option as a crashed or non-start new business could have significant risks.

If an equity loan is the chosen option interest on the loan and capital is rolled up and when the parents die this amount will be taken from their estate.

To make sure that inheritance tax is not payable money must be given at least seven years before the benefactor’s death.

The Conservative Party wish to abolish inheritance tax but is doubtful that it would withdrawn completely as it is an important asset to the Treasury.