CeRER – Free Mock

The residential nil rate band is an additional inheritance allowance that can be claimed by a personal representative when a person dies and leaves their main residence (or a share) to a lineal descendant. A lineal descendant is anyone who is  a direct descendant from the deceased, but includes adopted children and foster children.

A Drawdown facility is now the most popular income option from an equity release scheme. Smaller tranches of funds are taken and spent as income, rather than all in one go. This allows for further withdrawals at a later date. This also has the additional benefit that more equity remains in the property for longer and less interest rolls up on a lifetime mortgage.

As an alternative to equity release an individual may consider renting a fully furnished room within their main residence. Under UK tax rules an individual or a couple can rent a room within their own property and receive up to £7,500 in rent tax free. Any amount above is taxed as income at their highest marginal rate.

If both parties entered the scheme together then it will remain in force until the remaining party either dies, moves into long term care or moves to another main residence.

As part of the information gathering stage an adviser must establish both hard and soft facts to provide suitable advice. Hard facts: These are defined as tangible; people and items. Anything that can be proved then and there (matrimonial status, address, age, loan size etc.).  Soft facts: These can be defined as the client’s objectives, plans and how they feel.