Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
London and South East Families Pay Nearly Half of UK Inheritance Tax
Families in London and the South East paid £3.3 billion in inheritance tax (IHT) during the 2023/24 tax year, according to analysis by TWM Solicitors. This figure represents 46% of the UK's total inheritance tax bill of £7 billion, based on HMRC statistics published on 30 July.
The previous year, families in these two regions paid £3 billion, or 44% of the national total. The data highlights that inheritance tax is heavily concentrated in southern England, with 18 of the 20 parliamentary constituencies with the highest IHT bills located in London, the South East, or within commuting distance of the capital.
Kensington recorded the highest inheritance tax liability at £107 million, followed by Cities of London and Westminster (£97 million), Richmond Park (£84 million), Hampstead and Kilburn (£70 million), and Esher and Walton (£70 million).
TWM Solicitors noted that rising house prices and frozen tax thresholds are contributing to more families becoming liable for inheritance tax. The number of estates valued at more than £1 million continued to rise, reaching 9,130 in 2023/24, up from 9,070 the previous year and 7,905 five years ago. These estates paid a total of £1.18 billion in inheritance tax during the year.
The HMRC figures indicate that as asset values increase and tax-free thresholds remain unchanged, a growing number of families are paying inheritance tax, even when the real value of their assets has not increased significantly after inflation.
For letting agents and inventory clerks, these trends may impact property transactions and estate planning in high-value areas, particularly in London and the South East.
Source: Mortgage Strategy