Equity Release for Gifting to Family: How It Works

Many homeowners over 55 are choosing to use equity release not just for themselves, but to support their loved ones. Whether it’s helping children onto the property ladder, funding grandchildren’s education, or gifting an early inheritance, equity release offers a way to share your wealth during your lifetime.

What is Equity Release?

Equity release allows you to unlock tax-free cash from the value of your home without having to sell or move out. The most common type is a lifetime mortgage, where you borrow against your property, with the loan (plus interest) repaid when you pass away or move into long-term care.

Why Use Equity Release for Family Gifts?

• Help Loved Ones Sooner – Instead of waiting until your estate is passed on, you can support your family when they need it most.
• Property Ladder Support – Rising house prices mean many first-time buyers need help with deposits.
• Education Funding – Tuition fees, university living costs, or private schooling can be supported.
• Wedding or Life Events – Financial contributions towards special milestones.
• Inheritance Tax Planning – Gifting money now may help reduce the value of your estate for inheritance tax purposes (seek tax advice).

Things to Consider Before Gifting Through Equity Release

• Impact on Inheritance – Equity release reduces the value of your estate.
• Interest Roll-Up – If no payments are made, interest compounds over time.
• Gift Tax Rules – While most gifts are tax-free, inheritance tax could apply if you pass away within 7 years of gifting.
• Long-Term Security – Make sure you keep enough funds aside for your own future needs.
• Independent Advice – Always get advice from both an equity release adviser and, if gifting large sums, a financial planner.

Alternatives to Using Equity Release for Gifts

• Using savings or investments.
• Downsizing to release capital.
• Family loans instead of outright gifts.

Is Equity Release Right for You?

Equity release can be a meaningful way to see your loved ones benefit from your support while you’re alive. But it isn’t right for everyone. Speaking with a qualified adviser can help you understand whether this is the best option for you and your family.

Key Takeaway

Equity release provides homeowners over 55 with the opportunity to unlock tax-free cash to gift to family members, supporting major life events or financial challenges. With the right planning and advice, you can share your wealth today while still enjoying security in your own home.

If you’re considering equity release in Exeter, Plymouth, Torbay, Saltash or anywhere across Devon & Cornwall, contact a local broker today and take the first step toward unlocking the value of your home.

Alternatively follow the link below to the Equity Release web page at Stuart Ash Mortgage Services

Equity Release Advice – Stuart Ash – Mortgage Services

‘Your home may be repossessed if you do not keep up repayments on your mortgage’

A lifetime mortgage is a long-term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate