Gifting Deposit to Children via Equity Release in the West Midlands
£95,000 · Lifetime · 5.75% fixed for life (MER). A 69-year-old retired couple in the West Midlands wanted to help their two adult children buy their first homes by gifting deposits of £40,000 and £55,000 respectively.
The Client
69-year-old retired couple
The Challenge
A 69-year-old retired couple in the West Midlands wanted to help their two adult children buy their first homes by gifting deposits of £40,000 and £55,000 respectively. Their own home was worth £350,000 with no mortgage. They were not prepared to sell but were willing to consider equity release.
Our Solution
Doulton arranged a lifetime mortgage of £95,000 with the gifting of deposits as the stated purpose - fully accepted by the ERC member lender. Inheritance tax planning implications of the gifts were discussed and confirmed with the family's IFA. Both children's first homes were subsequently purchased.
The Outcome
Both children purchased their first homes with the gifted deposits. Parents retained ownership of their home. IHT planning implications confirmed. The couple are aware of the compound interest effect and have structured the plan accordingly with their IFA. Key highlights: Gifted deposits to both children - purpose accepted by lifetime mortgage lender; IHT planning implications confirmed with family IFA; Both children purchased their first homes as a result.