THE SCENARIO

Mrs Jones was referred to John Lamb through one of our professional connections. Having lost her husband many years ago she was living alone in a central London property worth £4 million. Mrs Jones had an investment portfolio worth £1.9 million which was providing very comfortable standard of living.

Her own children where already financial stable and did not require additional support however she wanted to help her granddaughter purchase a property and to explore her options on how to achieve this. With income primarily deriving from her investment portfolio, Mrs Jones wanted this to remain untouched.

As a widow, Mrs Jones understood that should she die, her estate would be subject to inheritance tax, this then became an additional topic for conversation.

OUR SOLUTION

After conducting detailed research, we recommended a Lifetime Mortgage of £1.6 million that provided the required cash lump sum at the best available interest rate, fixed for the life of the loan.  As an Equity Release Council approved plan, the Lifetime Mortgage was portable, allowing Mrs Jones to move in the future should her own personal circumstances change.

Mrs Jones was able to provide a ‘living inheritance’ by gifting funds, that would help her granddaughter get onto the property ladder. As the funds were being gifted, there was also an IHT saving of £640,000, providing that Mr Jones lived for a further 7 years. In order to ensure that the IHT savings was protected, we arranged a short-term life insurance policy that would pay the IHT liability in full, if she died within this period.

The equity released and accrued interest itself would also be a debt on her estate, further reducing the IHT bill.