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Find out all about average inheritance tax liabilities (IHT) and key information on Wills, Trusts and Probate in Hackney.
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This page covers inheritance related issues of specific interest to residents of Hackney, including:
About property in Hackney and Inheritance Tax
Hackney has seen huge growth in average house prices over the last 20 years. As such, many families who have always lived in modest family housing now find themselves sitting in properties worth a considerable fortune.
This is great in one way, but the sudden increase in a family’s IHT liability is certainly not.
Property growth since 2014
Prices have shot up by 21% since 2014, along with IHT liabilities. Here are some average property prices in 2018:
IHT liability based on average property values
Based on these valuations, we can work out the average IHT liability. IHT is calculated at 40% over the Nil Rate Band. This currently stands at £325,000 per person.
So, for a single person, the IHT liability would be:
Don’t forget that these figures are only based on average property prices. If you have savings, pensions, investments and valuable possessions such as jewellery and art then your IHT bill would be considerably more.
How can I reduce my IHT liability?
The above figures are over the national average. However, there are things you can do to help make your IHT bill more manageable. This will reduce the overall amount that your family will have to pay HMRC in the event of your death.
In the first instance, you should speak to one of our Will consultants who can advise you on the best course of action based on your individual circumstances.
Wills & Guardianship
Having Guardianship in your Will is extremely important if you have children. Guardianship specifies to the courts how you wish your children to be cared for in the event of your death. Without this information, it is left for the Courts to decide and a judge will ultimately have the final say on who takes responsibility for them.
Trusts and how they can be used to protect your property
You can insert a Trust into your Will to help manage your money in the vent of your death. For example, you might want to add one to specify that your children inherit at 25 rather than the standard legal age of 18.
Another widely used Trust is called a Disabled Trust. This can be used to leave money to a disabled discretionary relative in a way that won’t have a negative impact on their disability allowances.
Lasting Power of Attorney
An LPA is a legal document that gives someone you trust the authority to act for you if you become too ill to do so for yourself. This includes things like paying bills, speaking to the bank and making important decisions about medical treatment.
It is important to get an LPA while you are healthy as it is not possible to get one if you are deemed to have already lost mental capacity.