Subjects:

Banking and Finance

Contents:

INTRODUCTION

What is Equity Release?

The Market environment

Client Profile

Analysis of Market and Client Profile

EQUITY RELEASE SCHEMES

Overview

Home Reversion Schemes

Lifetime Mortgages: Home Equity Release Mortgage (HERM)

Annuity Based Schemes

Common Factors

ADVISING THE CLIENT

Professional Issues

Alternative Solutions

Practical Issues

Check-out the Provider/Adviser

EQUITY RELEASE: USES AND ABUSES

Mitigating Inheritance Tax

Funding Residential Care

Supplementing Income and/or Capital

Speculative Investment

Living Inheritance

Matrimonial Settlement

Buying Property Overseas

SAFEGUARDS

Introduction

Codes of Conduct

Financial Services Authority (FSA)

Consumer Credit Act 1974

Annuity and Investment Based Schemes

Prescribed Warnings

Professional Indemnity

APPENDICES

Useful Addresses

Further Reading

Roll-up Loan Interest Table

Standard SHIP Certificate

Precedents

The equity release market is one of the fastest growing sectors of the financial services industry. Unlocking money from homes to support low incomes has proven to be an attractive option especially in times of falling stock markets, low interest rates and under-performing pension schemes.

Lawyers and financial advisers need to be aware of the legal framework in which such equity release schemes operate. This new guide provides:

• a comprehensive review of the various types of schemes available,

• advice on the professional and practical issues surrounding such schemes,

• an insight into how such schemes can be used to mitigate inheritance tax, pay for residential care, fund speculative investment, and help settle matrimonial settlements; and

• an examination of the safety procedures in force to protect clients including those of the FSA and various Codes of Conduct.