Equity release for OAP parents - pros, cons, options?

J

JIMA

Guest
Hello, my parents (OAPs late 60's) are considering releasing some equity from their house - which they own outright - using one of these equity release schemes available.
I understand that this is a reasonably expensive way to gain access to money, but I cannot really afford to contribute too much (neither can my sibling - there are only the two of us) so it seems difficult to avoid this cost.

I hate to see so much money being eaten up and would consider:
1. just giving them a bunch of cash from my SSIA if that would help - but I don't know the tax implications or anything else,
2. giving them money using a covenant - I'm told this can be reasonably low cost due to tax breaks - but I don't know how these work, or the tax implications either.

Any advice, comments?
 
Do a search for the terms "SHIP" and/or "RRL" and/or (BoI) "LifeLoan" for info on mortgage products that might be of interest. Bear in mind that there are significant cons with most of these.

Info on Capital Acquisitions Tax (including Gift Tax) here:

[broken link removed]

Info on covenants here.

[broken link removed]
 
Thanks ClubMan,
I'm off to try to make some sense of this stuff.
 
JIMA,

Just make sure that they read the small print. This can be a very expensive option. Maybe get some financial advice, there may be other ways to doing this.
 
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