Don't know whether to admire the spirit of enterprise or scream.
5 years into solar panels. Today received a letter from an outfit who would like me to hand over the remainder of my annual Feed In Tariff for a lump sum to choose whatever I wish to do with it including paying off those Christmas bills. Titled Solar Equity Release.
One benefit is that they would take over the maintenance and any repair costs of the instillation. That would leave me with the electricity the panels generate.
Clearly they knew I had a system fitted and that I owned the panels rather than leasing my roof space off.
Hope they don't start cold calling :(
Err I don't think so.
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I concur, could that sort of scheme cause problems when you come to sell your house?
After all the new owners might not be able to change the format of the roof (adding a dormer window etc) if they were unable to do anything to the solar panels?
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I looked at "ordinary" equity release a couple of weeks ago, as we would like to have a wodge to tuck way to ensure the last two years of school fees for our granddaughter.
All being equal, our grandson who is 13 now, should be OK until A levels.
The school they both attend has some of the best A levels in the country and I'm sad that the lass may not be able to stay the last two years to sit them there.
As I'm 81 now and my wife will be 80 next July, I thought there might be a decent % of current valuation available.
The example I was given was about 45% of current valuation, which was a no-no for me.
We are both concerned that possible "care" home fees might diminish our estate, such as it is - no IHT for us - to the extent that our legacy to our daughter would be slight, to say the least.
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Actually 45% is not too bad. Life expectancy for your wife is around 10 years and yours is around 8 so they might have to wait a fair while for their money.
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I've had cold calls regarding this kind of scheme, also an "upgrade" to my system which will immensely increase it's output.
The MCS database has apparently been nicked and sold on which is why the sudden increase in callers who know I have panels (and who don't care about the telephone preference scheme).
Both types of call are not worth listening to.
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Equity Relwase is the "work of the devil" - if you are desparate for cash better to
move from large house to smaller one.
Equity release fees & interest rates are hefty - no repyments BUT their share of the house value escalates - compound interest is the key to them amking megabucks -
Rule of 72
Divide 72 by the interest rate tells you how long till the debt doubles.
4% takes 18 years
6% takes 12 years
8% takes 9 years
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How about we sell our house on the open market and, without strings, give our daughter the dosh.
A few months later she buys a bungalow and lets us live in it rent free.
Would the 7 year rule apply on the original gift?
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A few months later she buys a bungalow and lets us live in it rent
>> free.
You'd have to check but I'm pretty sure that's a no no.
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>> You'd have to check but I'm pretty sure that's a no no.
Anything in that area needs good professional advice.
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Yes roger needs to speak to a professional in such matters, but as he's asking on here ;)
I don't think you can allow people to live rent free in that manner as it's a tax dodge. Although I've known people live rent free (as a sole occupier) in another person's house. The IR never cottened on so no one was the wiser.
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You would almost definitely get caught by the "Gift with the Reservation of Benefit and Pre-owned Assets" ruling.
As others have said - get professional advice.
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You give your daughter say £250K
The inheritance 7 year clock starts on that day. 40% in year 1, 40% x 6/7 in year 2, 40% x 5/7 in year 3.....after 7 years the IHT on the £250K is zero.
If she buys a bungalow and lets you live in it rent free she pays capital gains on it's sale after you depart.
For costs associated with going into care it would be considered as your bungalow/money UNLESS you are paying the correct Commercial Rent to her for the house & she paying tax on the rent received!!. You cannot give £££s away & still use the asset or something bought with the money "you gave away"!
Value of some assets is exempt, working farmland, forestry.......
James Dyson of the vacuum cleaners is buying swathes of farmland £200m here, £100m there.... all over the UK - exempt from IHT seems the reason.
Last edited by: Falkirk Bairn on Sat 31 Dec 16 at 18:07
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Unless I win the lottery my/our estate will NEVER attract inheritance tax!
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I assume that your first problem is to release sufficient funds for the child's fees? Makes sense, and its quite manageable.
I further assume that the second half of your problem is how to make sure that your daughter gets your house/money and the state pays for any necessary nursing home, rather than you paying for it yourself?
I guess you see that as quite different to an immigrant trying to take UK State [our] money that he's not entitled to?
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What I'd' really like is the option to buy legally a goodly dose of Nembutal to avoid a "care" home, if it looks likely!
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It's only exempt from IHTif you actually farm it, but I'm sure there are arangements in place that ale it look as though that's what he's doing. Subsidised by the rest of us 😡
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He owns tons of land around where I live, and of all his farms that I've been on, they are proper working farms.
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New Money Making Scheme - FIT Equity Release - zippy
