Charge on property/equity release

[Ryszu140458]

Hi all, a very good friend is really ill (terminal) and he has asked me to loan him some money (250k ) with a charge on his house for its full value (£350k). The only stipulation is he continues to live there until he passes. Is this legal and if so, what sort of agreement is necessary to put this in place? How will the HMRC view it and will I be able to retain the house after his death in lieu of the charge
many thanks

[alastairs]

Very interesting question. I would definitely seek out legal and professional advice regarding this as there are all sort of implications I believe. If your friend and you want an easier route, equity release (as you mentioned) would be a "quick-ish fix". Not sure on the amounts though as I don't think you can release/borrow that much using ER. Just did a quick search for a calculator and got lots of "submit your details" before an answer was given :@ . Found this one: https://www.equityreleasescotland.or...se-calculator/ if you wanted to check but basically according to that calculator your friend would have to be 95 to release 192.5K from the 350K valued house. So there is still quite a shortfall to make up. Maybe a combo of ER and your funds? Again, don't take this as "gospel" and consult with professionals/legal people.

[Ryszu140458]

Hi Alastairs
Thanks for your reply. I have put into process buying his house outright and installing him as a tenant (peppercorn rent) with a lifelong tenancy, It seems to tick all the boxes apart from the 2nd property 10k stamp duty (ouch!!!!)

[alastairs]

Fair play Ryszu140458. Yeah, the "dreaded" stamp duty can be a pain in the backside. Sounds like you know what you are doing. Hope all goes well for you!