Each year an estimated 2,000 families are unable to afford the average up front IHT bill of around £200,000. To help unlock these estates, Tower Street Finance has created the Inheritance Tax (IHT) Loan.
Regulated by the Financial Conduct Authority, the Tower Street Finance IHT Loan is paid directly to the Inland Revenue, allowing families to start the legal process and receive their inheritance.
Tower Street Finance managing director Andrew Bartle said: “We’ve worked closely with solicitors to create the IHT Loan as our research among 2,000 UK adults shows that 50 per cent would turn to their legal representative for advice on dealing with IHT.
“The product not only provides a solution for executors looking to stand to benefit from an inheritance, but also solicitors managing the estate or themselves acting as executors.
“The IHT Loan launched in November last year and the response was immediately positive. We have more than 100 partner firms on board and that’s growing daily.”
The IHT Loan is paid directly to HMRC, there are no credit checks, no charge over property, no personal liability, or monthly repayments.
The loan is repaid from the estate funds once it is ready to distribute. There is a 2 per cent origination fee, capped at £1,500 which can be added to the loan, and a fixed yearly interest rate of 19.6 per cent. Interest roll up is capped at 30 months.
Tower Street Finance works with lawyers and pays an introductory fee once the loan has completed. Any unclaimed fees are donated to the company’s charity partner, Cruse Bereavement Care.
The IHT Loan is the second product from Tower Street Finance. It also offers its award-winning Inheritance Advance, a product for beneficiaries who want to access their inheritance more quickly than the 9 to 12 months it usually takes.