1 in 40 people in the UK inherit an average of £17,500 each year. The total after tax is £31 billion.

The average estate leaves £90,000 net of tax and the average amount received by each individual is £17,500. This suggests that, on average, people share out their bequests between five people. Some 10 per cent of beneficiaries receive £50,000 or more. A further 30 per cent receive £10,000 or more, enough to make a down-payment on a home or pay off a sizeable amount of a mortgage.

Making the most of different solutions

Decreasing term assurance
Decreasing term assurance can be arranged to cover a potential Inheritance Tax liability and used as a Gift Inter Vivos policy. This is a type of decreasing term plan that actually reduces at the same rate as the chargeable Inheritance Tax on an estate as a result of a Potentially Exempt Transfer (PET).

Who will handle your affairs?

The ‘personal representative’ (the person nominated to handle the affairs of the deceased person) arranges to pay any Inheritance Tax that is due. You usually nominate the personal representative in your will (you can nominate more than one), in which case they are known as the ‘executor.’ If you die without leaving a will a court can nominate the personal representative, in which case they are known as the ‘administrator.’

Making sure the gift is not a gift for Inheritance Tax purposes

A gift with reservation is a gift which is not fully given away. Where gifts with reservation were made on or after 18 March 1986, you can include the assets as part of your estate but there is no 7 year limit as there is for outright gifts. A gift may begin as a gift with reservation but some time later the reservation may cease.

What will you choose?

There are plenty of interest rate options available to the homebuyer when taking out or switching mortgages and this is often the area that causes the most confusion, all of which have their advantages and disadvantages depending on your circumstances. It can be confusing understanding all the features of the different products and knowing which one to choose.

Maintaining housing provision

The Prime Minister recently announced the doubling of the number of new homes built as part of the ‘Kickstart’ initiative to open up mothballed sites. The reallocation of government money for housing is a clear and welcome recognition of the importance of the need to maintain housing provision and of house building to the economy.

Increase in new buyer enquiries reported

Expectations that house prices are set to rise have increased for the first time since May 2007 because of the low number of properties on the market and increased interest from potential buyers, according to the latest housing market survey.

Socially responsible and prudent solution to people in negative equity

The Nationwide Building Society has introduced a mortgage allowing borrowers to take loans worth 125 per cent of the value of the home they are buying. The lender said the loans offered a “socially responsible and prudent” solution to people in negative equity.

Over three quarters of new home owners would recommend their builder

The vast majority of Britain’s new home buyers would recommend their home builder to a friend, according to the Home Builders Federation’s (HBF’s) fourth annual Customer Satisfaction Survey.

The problems caused for lenders by imposing planning restrictions

A new briefing note has just been published by the Council of Mortgage Lenders (CML) for local authorities and housing associations to highlight the problems they can cause for lenders by imposing planning restrictions under section 106 of the Town and Country Planning Act 1990.

What the numbers show

Estimates suggest that a higher proportion of young first-time buyers than ever before are getting help from parents to enter the market. But, the latest data shows signs that lending criteria stopped tightening in May. Since reaching a record 25 per cent in February, the average first-time buyer deposit has remained unchanged. And the typical first-time buyer income multiple has held at 2.97 from April.

Measures taken by the authorities have stabilised the economy

The Council of Mortgage Lenders (CML) have announced that due to the large cut in interest rates they predict there will be fewer households falling behind with their mortgage payments this year, as well as a reduction in the number of homes taken into possession.

Not the only influence on mortgage pricing

The Council of Mortgage Lenders (CML) is concerned that some recent coverage of fixed-rate mortgage pricing fails to reflect the complex array of influences on lenders’ pricing strategies at present.

Underwriting a proportion of the lender’s ultimate risk of loss

The government has launched a Homeowners Mortgage Support scheme (HMS). This scheme enables eligible borrowers to defer a proportion of their interest payments for up to two years, with the government underwriting a proportion of the lender’s ultimate risk of loss.