Can you appropriate a property subject to an equity release mortgage for the benefit of charity beneficiaries
Technically there is no reason why such a property cannot be appropriated to a charity.
I anticipate the appropriation would be a step in a proposed sale of the property, rather than there being an intention to transfer the property to the charities (which the ER company might object to).
If the intention is to secure a tax free gain on sale, the implications of s.256(1) TCGA 1992 need to be considered. The proceeds used to discharge the equity release loan will not be applied for “charitable purposes”, which might result in the gain being chargeable to CGT in any event.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals