Research reveals Inheritance Tax hotspots across the UK

New research has revealed that the affluent area surrounding Guildford in Surrey has the highest proportion of people paying Inheritance Tax (IHT).

The study showed that 658 estates were subject to the tax in the town in 2015/16, paying on average £231,000 each.

In comparison, Wigan in Greater Manchester saw just 31 estates liable for IHT during the same period.

After Guildford, families living in South West London were the next most likely to pay Inheritance Tax, primarily as a result of higher property prices.

Meanwhile, the largest average bills for estates came from affluent families living in West London, who on average were liable for an IHT bill of £390,000.

In the South West, Bristol was the only part of the region to fall within the top 10 IHT hot spots, making it the only city outside the South East to make the list.

Jane Morgan, Business Manager at Direct Line Insurance, the company behind the research, said: “If you are concerned about the amount of tax that may be payable on your estate when the time comes, you could seek independent advice and investigate transferring money to beneficiaries early as a gift, or placing assets into trust to reduce your liabilities.”

Mike Bagg, Tax Partner at Milsted Langdon, said: “More than £5.2 billion was paid in Inheritance Tax during the last tax year – the highest amount since records began more than 30 years ago.

“This has led even the Government to question whether the tax is still fit for purpose, especially considering the growing cost of property, including the fast appreciating value of rural land owned by the UK’s farming communities.

“Farming business and landed estates are disproportionately affected by this form of taxation and so many would welcome a change to simplify the regime and hopefully reduce the tax bill for their future beneficiaries.

“Many land and property rich agricultural businesses could find themselves facing substantial bills, as any estates valued above the threshold for the nil-rate band and the upper wealth limit of the residence nil-rate band, which is set at £2 million, will be taxed at a rate of 40 per cent of their total value unless appropriate measures are taken to reduce the eventual amount to be paid.”

If you are interested in saving IHT to allow your beneficiaries to benefit from more of your wealth, please contact our IHT specialists

Link: Inheritance Tax Hotspots

Posted in London Office, News, Newswire.