Advantages
- Reduce any potential
Inheritance Tax - Know what proportion of
your home will be used - Leave a fixed proportion
of equity to your estate
HOME REVERSION
A 100% safe equity release for the over 65's
This concept is common in the UK and provides an alternative way of releasing equity in the form of cash or income from your property without going down the lending route and without the associated risks and ongoing costs. Home reversion schemes allow the client to sell part or all of their property but remain resident there rent free for the rest of their and their partners lives. After it has been independently valued, a purchase price dependent upon age and to a lesser degree health is set by the purchaser. E.g. a lady of 85 would typically receive around 60% of her property value, whilst a man of 75 would receive around 53%. The cash paid to the client is totally unencumbered and the client is free to spend it as they wish. Many of our clients using this route invest the capital to increase their retirement income, others pass it to their children, whilst some do it to save IHT or pay off a mortgage.
This concept can be applied to all kinds of residential property and property values here in Spain It is not dependent upon the clients existing income or other assets. For property values in excess of £500,000 then there may be some useful tax planning advantages for both UK and Spanish tax residents, and if the client has additional properties in the UK or elsewhere in Europe these can be incorporated into this planning. Our free initial consultation would ensure that it is a suitable route and in accordance with the clients financial objectives.
Case Study
Real case study of a Home Reversion Plan paying for Long Term Care Insurance and providing retirement income.
A lady aged 75 has an apartment valued at €370,000. by selling a reversionary interest she will receive €150,000 after all costs. She intends to use €50,000 to pay some bills and visit her family in Australia. She is investing €100,000 via us in lower risk funds on special terms (108% invested), and will receive a tax efficient income of €8,000 per annum (not guaranteed) to supplement her income. From the above income she chooses to pay a premium of €3,000 for her long term care costs.