Full reversion example
Your home is worth £100,000. You agree to sell all your property to the reversion company for half its current value, so you receive £50,000. When you die your house is worth £150,000, 100% of the house is owned by the reversion company, so there is no residual value to pass on to your beneficiaries.
Partial reversion example
Your home is worth £232,000. You agree to sell 50% your property to the reversion company for 25% its current value, so you receive £58,000. When you die, your house is worth £300,000.The reversion company will receive £150,000 in recompense for their original loan of £58,000, your estate will have £150,000 to pass on to your beneficiaries.
Advantages of home reversion plans
- You continue to live in your home
- No monthly interest repayments
- You control what portion of the property is left to your beneficiaries – If you sell 50% of your property, then 50% is still available to be left to your beneficiaries
- Plan provides a tax-free cash lump sum and/or partial payments
- The payment is larger if the applicant suffers impaired health