Equity Release Schemes
Full Reversion Plans
You sell 100% of your home to a reversion company for a lump sum, but you retain the right to live there, either rent-free or for a nominal rent.When your home is eventually sold the reversion company is recompensed. When you sell 100% of your home to the reversion company it gets 100% of the proceeds of the subsequent sale prices, including any growth in value.
The reversion company will only pay you a percentage of the current market value for any share of your home that it buys because it may have to wait years for a return. The percentage of the value of your home that the reversion company will pay is typically between 30% and 60% of its current value, dependent upon your (and any partner's) age, sex and health
| Advantages | Disadvantages |
|---|---|
| No monthly repayments | The home is bought at a discount so may be less suitable for people in their 60's |
| Plan provides a cash lump sum and/or partial payments | If death occurs soon after taking out a plan, it could be poor value for money |
| The payment is larger if the applicant suffers impaired health | Reversion companies may not buy 'unusual properties' and/or in certain locations |
| House value is removed from the estate for Inheritance Tax purposes | If the applicant dies shortly after completing the sale, the family may receive a rebate |
| The decision cannot be overturned once the home is sold |
Partial Reversion plans
You sell a share of your home, to a reversion company for a lump sum, but you retain the right to live there, either rent-free or for a nominal rent. When your home is eventually sold the reversion company is recompensed. If you sell 50% of your home to the reversion company, it gets half of the proceeds, including any growth.
The reversion company will only pay you a percentage of the current market value for any share of your home that it buys because it may save to wait years for a return. The percentage of the value of your home that the reversion company will pay is typically between 30% and 60% of its current value, dependent upon your (and any partner's) age, sex and health.
| Advantages | Disadvantages |
|---|---|
| No monthly repayments | The home is bought at a discount, so may be less suitable for older people in better health |
| You share in any rise in the property's value | A further percentage of the home can be sold to release additional funds|Reversion companies may not buy 'unusual properties' and/or in certain locations |
| The payment is larger if the applicant suffers impaired health | |
| Part of the property value is removed from the applicant's estate for Inheritance Tax purposes | |
| If the applicant dies shortly after completing the sale, the family may receive a rebate |
The Company cannot accept any liability for the accuracy of the information above or clients reliance on it.
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