DIY Equity Release

[ahoopet]

I want to buy a proportion of my father's house to allow him to free-up some of his capital. As he will continue to live there, what are the potential tax liabilities? e.g., would he have to pay rent proportional to my equity and what about IHT.

[Sludge]

The AB Editor has posted the following in another section of Answerbank:

 

I feel I should remind everyone that TheAnswerbank is a knowledge-exchange, not a message board on which laypeople are encouraged to exchange unqualified "advice" on legal and medical matters. To do so could potentially have unpleasant legal consequences. 
AB Editor Wed 29/12/04

 

You might therefore be best advised to consult a solicitor.  
 

[WoWo]

wise words indeed but to give you some pointers. No he would not be liable to pay any rent at all. IHT would only be payable if his estate is worth over �250,000 in total, if his house was worth say �200,000 and you purchased half (just for easy calculations) then unless he had circa �150,000 in savings IHT wouldn't be an issue. However as you are actually paying him for the house (or part of) then it would only benefit you in a IHT situation. IHT becomes a problem when parents transfer property to their children without payment. Whatever happens you will have to get a soliciter involved in the process so they will be able to answer more specific questions you have.

[Hgrove]

The kind of solicitor who would be able to help you is one who practises in the areas of trust and tax as well as land law.  Don't be afraid to shop around for a helpful solicitor.  If your father is an elderly person, Age Concern might have literature or other advice to point you in the right direction.