| A plan, sometimes called equity release, enabling the (normally elderly) owner of a property to utilise its capital value to their advantage (by providing an income) whilst still remaining in residence. Typically a building society or insurance company provides a loan of up to 80% of the property value and this loan is used to purchase an annuity or joint life annuity in the case of joint owners. The annuity payments are used to pay interest on the loan and provided the bulk of the loan is invested in this way tax relief can be claimed. (The remaining part of the loan can usually be taken in cash with no restrictions.) Thus after making interest payments net of tax relief there will be a surplus available to the owner or owners. Safe Home Income Plans (SHIP) is a self-regulatory body, formed in 1991, to promote fairer schemes after problems in the early days.
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