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Recycling Equity Release funds into a DGT

LouieD12LouieD12 Member
in Technical stuff

Hi all,

I am trying to find some information as to why you wouldn't be able to recycle funds coming from Equity Release into a DGT to get the money out of the estate whilst still retaining the NRB after 7 years.

This would only really be applicable to clients who would breach the RNRB.

This seems like it would be illegal or frowned upon but i cannot find any information relating to this.

If anyone could help or would know where to look, this would be much appreciated.

Thanks

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Comments

  • richardgoughrichardgough Member

    You can recycle equity release into a DGT - there is nothing in law to stop you.

    HOWEVER, this would (probably) be caught because the loan was being used "directly or indirectly" to the acquisition of assets subject to IHT relief i.e. the discount.

    So you won't get two lots of it relief- so you can't claim a deduction for the mortgage AND the deduction for the DGT under anti-avoidance legislation.

    So whilst you can do it, it almost certainly doesn't work and I guess your PI people wouldn't be too pleased (& neither wold your client's beneficiaries)! :)

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  • LouieD12LouieD12 Member

    Great Thanks Richard, we were thinking along the same lines.

    We have an adviser here who was querying it so we needed something official to say that we can't.

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