How Much Should You Really Give Your Kids? Inheritance, Incentives and Money Mindsets with Hamish Leng

Summary

Podcast Summary: Merryn Talks Money

Episode: How Much Should You Really Give Your Kids? Inheritance, Incentives and Money Mindsets
Date: December 17, 2025
Host: Merryn Somerset Webb
Guest: Hamish Lang (Financial Planner, Hamish Lang & Company)

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Episode Overview

In this episode, Merryn Somerset Webb tackles a perennial and complex financial question: How much should you really give your kids? Joined by seasoned financial planner Hamish Lang, they explore the tricky territory of inheritance, incentives, and money mindsets. The conversation blends practical tips with psychological insights, considering both the “how much” and the “how” of giving, the importance of fairness, tax efficiency, and, crucially, what helps kids become confident and competent with money.

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Key Discussion Points & Insights

1. The Psychology of Giving: Building Self-Confidence Around Money

• Guiding Principle: The most important factor when deciding how much (and when) to give is understanding your children’s personalities, particularly their self-confidence and money management skills. (04:14)
  • “If you’re self-confident in your own achievements and you are hungry, I think it doesn’t matter when you give money to people... I think the age is not really that important if you’ve got the other things right.” – Hamish Lang (04:14)
• Early Teaching: Start talking about money at home, around the dinner table, and involve children in small money decisions (e.g., pocket money, family charity donations, junior investment accounts). (05:21–06:57)
  • Notable anecdote: Hamish describes two siblings given small investment accounts—one experimented with cryptocurrency and lost, the other took risks, lost, then recovered. Both learned valuable lessons. (06:02–07:00)
• Achievement as Confidence: Self-confidence, not money, brings security and a good relationship with wealth. (07:40)
  • “No one has ever got self-confidence by being given money. They get self-confidence by achieving something for themselves.” – Hamish Lang (07:38)

2. Fairness vs. Individual Needs

• Tailoring Gifts: It’s reasonable to treat children differently based on maturity and money skills, but perceived unfairness can create lasting resentment. (08:18–09:22)
  • Example: Parents ceased ISA contributions for a son successful in finance but continued for a daughter in a lower-paying but meaningful job. The son felt “penalized” for his hard work, highlighting how fairness is subjective. (09:22–10:21)
  • “People’s view on fairness can be quite subjective.” – Hamish Lang (09:41)
• Managing Expectations: To avoid surprises and conflict, communicate will contents and intentions ahead of time. (10:46)

3. Incentives, Large Inheritances, and Motivation

• Will Inheritance Demotivate? While some worry that knowledge of a large inheritance can demotivate, Hamish observes that personal drive and early values are more powerful motivators. (12:43–14:23)
  • “Most people live up to their responsibilities if they have started early, the chat around the supper table.”
  • Helpful distinction made between lump sums vs. targeted help (e.g., for education, housing). (14:05)

4. Transparency About Family Wealth

• How Much Should Kids Know? Full disclosure about assets isn’t necessary. Sharing underlying financial principles and decision-making processes is more important. (17:50–18:36)
  • “I don’t think it’s necessary to say how much you’ve got... But I think you can talk about the principles of how you manage it...” – Hamish Lang (18:06)

5. Put Your Oxygen Mask on First

• Parental Security Takes Priority: Before gifting, ensure your own financial needs and retirement security are met. (18:36–20:19)
  • “The greatest gift you can give your children to a large degree is your own financial security.” – Merryn Somerset Webb (18:36)
  • “You need to know your number... [Perfection is] dying with a check to the undertaker bouncing in old age.” – Hamish Lang (19:21)

6. Efficient Ways to Gift: Tax and Practicalities

• Direct Gifts: Unconditional gifts are preferable when the time is right; if not, consider insurance in the interim. (21:21–22:03)
• Trusts: Now less tax-efficient and more contentious since 2006 changes, but discretionary trusts still useful in some cases, especially for less mature children. (22:03–22:54)
• Junior ISAs and Pensions: Junior ISAs are straightforward. Paying into a child’s pension (SIPP) can be powerful if started early, but caution over possible restrictions down the line. (21:10–24:37)
  • “It’s quite useful to know they can’t touch it until 55 or 57. That’s quite useful.” – Hamish Lang (24:04)
• Pensions as Inheritance: Changing tax rules have eroded the efficiency of passing pensions to heirs, so draw down pensions before other assets if possible. (24:37–24:50)
• Gifts from Income: A little-known exemption allows tax-free gifting from surplus income, provided it doesn’t affect the giver’s lifestyle. Must be regular, not one-off. (25:04–25:44)
  • “It’s a fantastic exemption... I was slightly surprised to see still remained in the budget.” – Hamish Lang (25:33)
• Equity Release: Can be a tool to free up money for giving in later life, but should be used with caution due to compounding interest. (27:22–28:46)
• Family Investment Companies & Insurance: Niche solutions like family investment companies or using life insurance to cover IHT liabilities may be appropriate in certain situations. (26:33–27:22)

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Notable Quotes & Memorable Moments

• On parenting and money:
  • “No one has ever got self-confidence by being given money. They get self-confidence by achieving something for themselves.” – Hamish Lang (07:38)
  • “The greatest gift you can give your children is your own financial security.” – Merryn Somerset Webb (18:36)
  • “Dying with a check to the undertaker bouncing in old age.” – Hamish Lang (19:21)
• On fairness and family dynamics:
  • “People’s view on fairness can be quite subjective.” – Hamish Lang (09:41)
  • “Tell people in principle what’s in the will to head that one off because I think it’s unfair to leave the children to sort it out.” – Hamish Lang (10:46)
• On timing:
  • “Giving with warm hands while you’re alive is better than giving with cold hands when you’re dead.” – German Saying via Hamish Lang (29:19)

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Timestamps for Key Segments

| Segment | Timestamp | |---------------------------------------------|------------------| | Intro & Framing of the Dilemma | 02:19–03:42 | | Teaching children about money | 04:14–07:00 | | Treating children fairly & inheritance angst | 08:18–10:21 | | Motivation & the impact of expected wealth | 12:43–14:23 | | Financial transparency with children | 17:50–18:36 | | Parental financial security first | 18:36–20:19 | | Efficient gifting options overview | 21:10–24:37 | | Gifting from income tax break | 25:04–25:44 | | Equity release & final reflections | 27:22–29:19 | | “Warm hands” quote, closing thoughts | 29:19–29:40 |

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Summary Takeaways

• Don’t confuse giving money with giving confidence: Children benefit most from experiences that help them become capable, not just from receiving cash.
• Fairness matters—but isn’t always simple: Transparency and open communication can stave off resentment and conflict, both during life and after death.
• Plan for yourself first: Ensure your own security before giving to your children.
• Gift thoughtfully and tax-efficiently: Leverage Junior ISAs, pensions, regular gifts from income, life insurance, and (if appropriate) trusts and equity release, always weighing up practicality and family dynamics.
• Communication is key: Explain principles and decisions, but detailed figures are less important than guiding values.

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Final thought:

“Giving with warm hands while you’re alive is better than giving with cold hands when you’re dead.” – (29:19)

An episode full of wisdom and practical advice for anyone considering their family’s financial future.

Transcript

[Hamish Lang]

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[Maren Sumzep Webb]

Welcome to Maren Talks yous Money, the personal finance edition of Maren Talks Money. In these bonus podcasts, we talk about the best strategies for making the most of your money. I'm Maren Sumzep Webb, Editor at Large for Bloomberg UK Wealth. On today's show, we are going to dive into a topic we briefly touched on during the latest episode with Suzanne Willey. If you haven't listened to that one, you really should. We talked about inheritance and how important it is to find some kind of balance between passing enough money to your heirs to give them the best opportunities possible, but not giving them so much it reduces their desire to work hard for themselves. Incentives matter. Everybody knows one well. Actually, does everyone know one unhappy Trust fund kit? I don't know. A lot of people do. And that's not the legacy we want to pass on to our children and our grandchildren. So joining me in the studio today with help with this naughty problem is Hamish Lang of Hamish Lang and Company, a small Knightsbridge based financial planning firm who specialize in helping families. I'm quoting here. Helping families and individuals achieve financial security and order and live the lives they want. Oh, sounds great. Hamish started as a financial planner in 1980. He spent four decades over. Four decades even. Apologies for Hamish for revealing your age here. For advising clients on gifting money to their heirs. His advice incorporates the psychological aspect of giving what we want to get into, as well as the tax and practical aspects. So he's perfectly placed to help us understand this tricky topic. Hamish, welcome to the show.

[Hamish Lang]

Thank you very much.

[Maren Sumzep Webb]

Right, this really is a naughty topic, actually. So there's two sides to this I want to get into today. The first being the actual money yourself. How much do you give? How do you do that? How do you educate around it? And the second being, how do you make this tax efficient? So why don't we start with the first bit? I mean, as the psychological aspect of it is so important. How do you talk to your kids about money, assuming you have money? And then how do you decide how much to give a child over a lifetime? Do you give it young? Do you give it late? Do you tell them what they're gonna get? How on earth do you make this work?

[Hamish Lang]

I think you need to start off with a few sort of guiding principles and understanding your children's weaknesses and strengths in that area. Not that he was a child of mine. If you take the late Gerald Grosvenor, Duke of Westminster, he was the hardest working person I've ever come, yet. He could have been a playboy. He worked incredibly hard. Other people I know have got lots, don't do anything at all. And so what are the factors? I think that self confidence is very important. I think if you're self confident in your own achievements and you are hungry, I think it doesn't matter. When you give money to people, you can give money to someone who's 25 or 20, but if they got that self confidence and hunger to do things for themselves, it doesn't matter. I think the age is not really that important if you've got the other things right.

[Maren Sumzep Webb]

Okay, well, now you're moving into a whole area of parenting that we all desperately want to hear about. How do you make that self confident child?

[Hamish Lang]

Well, I think it Starts a chat round the dinner table at home, I think. And you need to talk about money.

[Maren Sumzep Webb]

You.

[Hamish Lang]

You need to talk about. If you've got a family business, you need to talk about the factors that go into it. I think you can start off with giving someone pocket money and seeing what they do with it. You need to know how they work with it. And I was interested in. The Chancellor's sister said that the chancellor always put 25% of her money aside and spent the rest. It'd be interesting to see what she does with our economy.

[Maren Sumzep Webb]

Of course, I think we already know what she's doing with our economy. I'd like to see what she's doing with the 25% she's supposed to be setting aside.

[Hamish Lang]

Exactly.

[Maren Sumzep Webb]

So I'm not sure she's your best example, Hamish.

[Hamish Lang]

No, exactly. And so things like a little family charity, I mean, you don't have to give much to it. Just involving the kids, giving them five pounds when they're six years old just to see what they support, how they do it. It helps them learn about money. It learns that other people are less fortunate themselves. It's a really good tool. I think another one is, you know, open up as soon as you can an account with the likes of Hargreaves, Lansdowne, and put a little bit of money in it and say, look, here you are. See what you do with it? How do you invest it? And I. Two children, for example. The girl didn't do anything with it at all, apart from put money into cryptocurrency just before it fell. And it turned out she'd given. Put in £20 out of the £500 she got. So it was quite useful for the parents to know how she dealt with money.

[Maren Sumzep Webb]

But that's also. That's a pretty useful lesson early on, isn't it?

[Hamish Lang]

Yeah, it is, yeah. And therefore, probably that parent giving lots more money would probably. There's a danger of sitting in cash for 30 years. The boy, bright, technical, invested half of it in business he knew would fly. Actually, they all failed. And it was only the other half that, after three years, made back the loss. So the thousand pounds, I think it was 500 pounds, was exactly the same as it was after three years. Great lesson, great lesson for the child. Great lesson for the parent to understand what might happen with it. But I keep on coming back to this self confidence in. No one has ever got self confidence by being given money. They get self confidence by achieving something for themselves. It doesn't have to be financial. They could be a great flower ranger, they could be a good cabinet maker. It doesn't really matter. But it's just that belief for themselves. Because I think a lot of people often who don't have self confidence will try and buy friends. I know of a couple who would spend so much money having extravagant parties and holidays for their friends because they felt that people would think ill of them. And even then I said, you're going to be a bust by the time you were 55, they just couldn't stop.

[Maren Sumzep Webb]

Interesting. Now let's go back to the boy and the girl. If you have children who you have found out through the various methods you've discussed, are always going to have different attitudes to money and different behaviors around money, does that mean that you should treat them differently when you gift money?

[Hamish Lang]

To an extent, yes. So I think if someone is really. People get self confidence in time. You get someone who's got great self confidence at 16, someone maybe gets it at 25 or 30 or maybe never gets it. So I think you have to take that into consideration. But you also need to be fair. Cause otherwise that causes resentment.

[Maren Sumzep Webb]

But interesting, as I was gonna say. And one of the things that constantly comes up as a theme whenever there is breakdown in child and parent relationships is the idea that there's been unfairness. So if you give money to one child at 21, because they look like they're gonna manage it very well and they're full of confidence and maybe they need a deposit for a house, et cetera. And then you look at your other child and go, nah, not ready for it yet, and leave it until they're 30. There's space for a lot of conflict in that.

[Hamish Lang]

There is. But if you come back to my example of the Hargreaves Lansdowne account, you can set some parameters on it and say, you know, when you show me that you are responsible with it, it doesn't mean to say you need to make huge amounts of money, but you maybe set some rules so there's no surprises on that. But people's view on fairness can be quite subjective. I had a another two children and one of them was doing very well in the city after University. And at 25, the parents said, we're going to stop making ISA contributions for you. The girl was doing Teach first, not earning much money. And at 25, the parents decided to keep funding the contribution to the ISA for the impoverished teacher. And the boy got angst about it because he said, through my wit and skill and my hard work, you're penalizing me. But the point is it was very useful for the parents to understand that for what was a relatively small amount of money, what might come down the.

[Maren Sumzep Webb]

Way, Yeah, I mean I'm with the boy, I'm with the boy. Why should be, you should be. She's, you know, you make your choices. Right. And parents should always be consistently, constantly fair. And it always seems to me that regardless of their children's situation, they should, to the extent that they can equalize what they give. I mean, I don't know, I've never been present at the reading of a will but I reckon that's where the real fights kick off. Right.

[Hamish Lang]

Well, I think you need to tell people in principle what's in the will to head that one off because I think it's unfair to leave the children to sort it out. But going back to this fairness, I think it is subjective. Let's say that girl had needed £100,000 of cancer treatment. Would you still say, sorry, we've got to give 100,000 to the boy? You know, these are sort of things to think about.

[Maren Sumzep Webb]

Not really for us to argue about this is it. But I think that's different actually because that's an emergency and it's not a wealth building measure, it's a survival measure, you know. So if you're looking at giving people who have similar, similar health, similar everything and what they're doing is building wealth but they've chosen to do it via different routes because these are choices. Why should they be penalized or rewarded for by their parents for the different choices? I don't know, people will feel very differently on these things but I'm a great one for treat them all exactly the same to the extent that you can. What about large inheritances? I mean there's a lot of incentive in the system for the very wealthy to dispose of as much of their, of their wealth as possible early. Right. In order to avoid the seven year rule and kick themselves out of the inheritance tax bracket. But there's a, there's a downside to people knowing that they will inherit large amounts of money, isn't there? And we talked about self confidence earlier and self esteem and the way that people are driven through life. But it's hard to be driven, hard to really get out there and work 16 hours a days if you're expecting to inherit enough money to never have to work again. Maybe in your 30s or 40s. And you see this all the time, don't you? People who know that their parents house is worth a Certain amount of one day that's coming to them. And also people who know that their parents have large amounts of money sitting around the place that they will not want to pay inheritance tax on. It's a disincentive to work. How do you manage it? You, if you are very well off and you and your children both know there's a large amount of money coming their way?

[Hamish Lang]

Well, I come back to this thing about personal achievement, self confidence. People want to achieve for themselves to be that best flower ranger. It's not going to knock them off course. I mean, there will be a few, of course, but generally it won't. And I was very interested when I was at school, people seemed to be very interested in who their parents were. Children go to school now, they're not interested. It's what have you done? What are you doing? So that's a very good peer pressure to do well for yourself, not necessarily financially. And again, I come back to Gerald Grosvenor. He knew he was going to get a huge amount of money, but he worked hard. So it's not always the case that just because you are going to get lots of money. I would say most people live up to their responsibilities if they have started early, the chat around the supper table. I think it's an unusual thing that people actually do go off the rails and don't work hard. I also think there's a difference between giving money well, you know, here's £10 million put in your bank account and money to help pay for education, to buy a house, that sort of thing. So sometimes you can sort of, you give it with an explanation of why you're giving it now. But on the other hand, if someone's not ready for it and you're worried about inheritance tax, I wouldn't get too bogged down by it, by a cheap life assurance policy for the next 20 years and just ignore inheritance tax and then come back to it later. I think there are ways to do it.

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[Maren Sumzep Webb]

To what extent do you think that you should be completely open with your children about their finances should they know exactly how much you have and how you have invested it and what there is there or is there value in keeping your finances relatively separate from them?

[Hamish Lang]

I think you what I don't think there's. It's necessary to say how much you've got. I think probably that's not a great thing, particularly early on, but I think you can talk about the principles of how you manage it and the difficulties and the concerns. And I think it's important someone, if their parents can afford to buy a high top Ferrari, but only buy a sort of a cheap estate car because it's more practical. It's useful to say why we're doing that.

[Maren Sumzep Webb]

One thing I sort of want to make clear before we go on, because I want to go on to the tax element of things now and how to do this efficiently. But one thing I want to make clear, and I bet you do as well, is that we always say, John, John, John and I, my who does the podcast with me often, that the greatest gift you can give your children to a large degree is your own financial security. There's absolutely nothing worse for someone struggling in their 30s or their 40s with children, school fees, mortgages, et cetera, to suddenly find that their parents are broke and need some of the money back. So one of the most important things in this entire conversation is, as they say, to put on your own, your own oxygen mask first make sure that your own finances are secure and your retirement is secure before you start shoveling money to your kids. Isn't that fair?

[Hamish Lang]

It's a very good point. And you, every person and family should in my view, have a financial plan and the parents particularly you need to know your number so that you end you perfection is dying with a check to the undertaker, bouncing in old age.

[Maren Sumzep Webb]

No pockets in a shroud, as they always say.

[Hamish Lang]

Exactly. And so you need to isolate your number for yourself. You don't need to give away the rest. But you know that's straight away. But you know that's available and you know that you're not be asking your children back for it.

[Maren Sumzep Webb]

When you say your number, you mean the amount of money that you have calculated you will require to take you to the end of your retirement to your death.

[Hamish Lang]

Correct. And that could be a mix, obviously, mixture of pensions and capital, but it needs to be amortized down to zero in my view. You say, well I'll live to 100, these the assumptions I'll use. And you add on maybe 30% more if you're 60, because things could go wrong and you just come up with your number.

[Maren Sumzep Webb]

Yeah. And then you Work from that.

[Hamish Lang]

You know, what's that? And you know, probably you need to have your house, unless it's a mansion out of it, so you're not. You just keep that out of it. But you can always use equity release in old age to give away some money using that. But the child should also have a financial plan. The other day, sadly, parents died and there was a child of 25, got about 5 million pounds and they earned 30,000. It has made no difference to their way of thinking and their relationship with money because they started early having a plan, they knew, they budgeted and they knew what it was for.

[Maren Sumzep Webb]

Yeah. Right, so let's look at the tax side of this. I mean, regardless of your base level of wealth, because not everybody, everybody listening to this podcast is gonna have £5 million.

[Hamish Lang]

No, exactly.

[Maren Sumzep Webb]

So, looking at it from the very beginning, what are the most efficient ways to pass money to your children? I mean, obviously the first staging post is the junior isa.

[Hamish Lang]

Right, well, there's a Junior isa, obviously. But actually giving them money without any ties I think is actually you're not sort of managing stuff for them and you give it to them freely so they know it's theirs. And I think that's a good starting point. And we've discussed when's the right time to do that. If it's not the right time to do it, just defer it and buy a cheap life insurance policy. Trusts are, since 2006, they've become much more difficult. There's a limitation putting money into a trust and actually a lot of trusts down the line end up by causing rows and resentments.

[Maren Sumzep Webb]

Yeah. And you have that 10 year charge. Right. So you're effectively paying inheritance proton stacks anyway, in the end you are.

[Hamish Lang]

Yeah.

[Maren Sumzep Webb]

So remind me of that. You pay 6% of the.

[Hamish Lang]

It's a periodic charge. You pay 6%, basically 6% of the.

[Maren Sumzep Webb]

Value of the assets inside the trust every 10 years. The idea being that effectively over a generation that comes out at much the same as 40% inheritance tax is how the maths work, give or take, right?

[Hamish Lang]

Well, I think that's the principle. But you can of course use it. I mean, some, you can use it as a tool if someone's young, and then you don't have to keep it there forever. You can say, well, are not quite sure how things are going, use the discretionary trust and then dish it out, get the trustees to dish it out and you could be the trustee in 10 or 15 years time. And of course, the great thing about discretionary trust is no One needs to know they're a beneficiary. That's quite useful. If you've got someone who's a bit. You're unsure about them, they're a very useful tool for that.

[Maren Sumzep Webb]

Okay, so we've got that. Although it's not necessarily something to do over a full lifetime, we've got the Junior isa, which is relatively straightforward. And then, of course, a lot of people pay into pensions for their children, don't they?

[Hamish Lang]

They do, but there's a. Well, if they're not earning, there's a limit you can put in, which is 3,600.

[Maren Sumzep Webb]

But if you start that very early, that if you start a 3600 a year sip for a child, that can compound quite nicely into the beginning of their working career.

[Hamish Lang]

Very nicely. I suppose that just the caveat is that if pensions are going to be a political football down the line and there's limitations on them, you could find that actually by funding even a small amount at an early age, it limits their benefits. So if they're a doctor and they're on a final salary, pension, and then so not that long ago, there was sort of the value of. It was lifetime allowance, actually. You could overfund them, but it's just a fact, it is quite useful. And also, when people are working, often their parents will make them a contribution to help chop up their £60,000 allowance. And they all say it's quite useful to know they can't touch it until 55 or 57. That's quite useful.

[Maren Sumzep Webb]

Yes. That's effectively a kind of trust, isn't it? It is. One thing that we don't want to do anymore is this idea that we had previously when your pension pot could be passed down free of inheritance tax. That became a marvelous way to think about passing money to your children. I know a lot of financial advisors started saying, spend everything outside your pension first, leave the pension until last, because it's such an efficient way to hand capital to your. That ship, like many other ships, has now sailed, hasn't it?

[Hamish Lang]

Well, it's the other way around now. You need to draw the pension out and exhaust it in your natural lifetime.

[Maren Sumzep Webb]

Yeah, because pensions. Because pensions are now subject to inheritance tax. And what you don't want is to end up paying inheritance tax and then income tax on the withdrawal from a pension.

[Hamish Lang]

Well, that's the thing. That's the thing. Before Osborne changed it, one must remember that after 75, it was 55%. So tax on it. So it's not as though that tax won't it's sort of come back. Yeah, it's come back.

[Maren Sumzep Webb]

Yeah. Now the other thing that I think is that the, the one thing that isn't discussed very much and you probably do this all the time in the context of handing money to your children is gifts out of income. And there is this neat little sidestep to the tax system, isn't there, where you can gift to your children or indeed to anybody money from your income, as long as gifting that money does not affect your lifestyle and generally it.

[Hamish Lang]

Should, it needs to be and on a regular basis.

[Maren Sumzep Webb]

Yes.

[Hamish Lang]

So you can't do it as a one off, but it's a, for those lucky enough to have decent surplus income, it's a fantastic exemption and I was slightly surprised to see still remained in the budget, but there we are.

[Maren Sumzep Webb]

Well, yes, yes. Because it, you know, if you do have a very high income and a relatively frugal lifestyle, that is a way to pass on a lot of money.

[Hamish Lang]

But I think it's a slightly caveat that a lot of people think, for example, let's say they're not drawing their pension, they suddenly draw the pension. They say that all of that money is therefore surplus. But if they've been living off capital as well, it's not the income that they take from the pension will first of all replace the capital for the calculation. So it's not always outside. But on the other hand, if they're giving it and they survive for seven years anyway, it's outside their estate even if it is not surplus income.

[Maren Sumzep Webb]

Yeah, yeah, okay. Quite a few things taken into account there anything else on the tax front that we should talk about?

[Hamish Lang]

There's family investment companies where, you know, the parent can be the director, but the children of the children that might.

[Maren Sumzep Webb]

Be quite niche for the audience. I've great faith in the wealth of our audience, but I'm not sure there are that many who are going to go up and set out a, a family investment company.

[Hamish Lang]

It's true, but I do. But you would ask you asked questions. So I chucked it out when I started. I'm so old when I started to work that there were no business property relief and agricultural property relief for most farmers and people in business set aside an annual sum to buy a life policy payable at death in trust. And I think actually in a way people are going now back to that and it is a very, very useful tool. And it's not if you start young, it's, you know, in your 50s, it's not that expensive and it does mean you don't have to give huge amounts of money away at the wrong time. It's very, very useful thing.

[Maren Sumzep Webb]

Yeah, okay, interesting. And you mentioned earlier equity release as a way to hand money onto your children.

[Mastercard Representative]

Yes.

[Hamish Lang]

If you have a house or a flat with a long lease, you can take a percentage of the value and you can either use it for you to spend to supplement your income or your resources, or if you don't need it, you can give it away last for seven years. So obviously the interest, well, you can either pay it, but you probably want to clock it up. The interest and loan are deducted from your estate when you die. So you could argue that actually 40% of that is paid by the tax system and actually you can move from the house if you need care. It's quite a good system, but not probably until you're in old age, otherwise the interest will clock up and eat the heart out.

[Maren Sumzep Webb]

I mean, there've been quite a few shockers in that, haven't there? I mean, it's not. I don't think it's allowed anymore. But in the old days you had people who took out equity release too early and they owed more than the house is worth.

[Hamish Lang]

Yeah, yeah, yeah. Well, equity release schemes won't allow negative equity. So if you live like there's the oldest woman in the world who's 116, who I'm very proud to see is a Brit. So if she'd taken an equity lease in the 70s, she was still living.

[Maren Sumzep Webb]

In her property, so she'll been living rent free for quite a long time, but on the other hand have left nothing for her heirs, although of course they may have predeceased her at this point.

[Hamish Lang]

Yes. But it did allow her, if she was in that situation, to use other money to give away in her lifetime. And she's obviously lived for seven years.

[Maren Sumzep Webb]

Yeah. You know, well done her. Well done, her. Well, this would be quite interesting when we come to the mansion tax. Right. Assuming it ever appears, which I'm not 100 convinced about, and of course it's not really a mansion tax, it's a reasonably big house tax, people are going to be able to roll up that liability and pay it on the sale of the house or indeed on death, if that is when the house is sold. Right. So that'll be a similar feel.

[Hamish Lang]

It seems to be. It seems to be. There's a nice German quote which you might like to hear. Giving with warm hands while you're alive is better than giving with cold hands when you're dead. Thanks. Well, the fun.

[Maren Sumzep Webb]

Okay, I think we'll end on that. We'll end on that. That's something for parents to think about over Christmas.

[Hamish Lang]

Indeed.

[Maren Sumzep Webb]

Hamish, thank you so much for joining us today. Really useful.

[Hamish Lang]

Thank you. Marion. Thank you.

[Maren Sumzep Webb]

Thanks for listening to this week's marantalks yous Money. If you like our show, rate, review and subscribe wherever you listen to podcast podcasts. Also, be sure to follow me and John on X or Twitter. I am MarynesW and John is JohnStapek. This episode was produced by Sama, Saadi and Moses. And special thanks of course to Heish and of course, as usual, question and comments on this show and all our shows are always welcome. Our show email is marinmoneyloomburg.net.

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