Britain's top 10 inheritance tax hotspots revealed: Guildford tops the list as IHT receipts hit record highs

Published by Edmund Greaves on 24 October 2018.
Last updated on 24 October 2018

Inheritance tax review ordered by the government

Guildford in Surrey has been named the inheritance tax (IHT) capital of Britain, according to data from Direct Line.

The town in the South East saw 658 estates incur an average liability of £231,003 in the 2015/16 tax year, according to data Direct Line obtained with a Freedom of Information (FOI) request to HM Revenue & Customs.

In total estates in Guildford paid £152 million in IHT to the tax man. However, it was not the highest paying area.

That dubious distinction goes to South West London, which saw 655 estates with an average liability of £346,565 pay out £227 million to HMRC in 2015/16.

IHT bills in other parts of the UK pale in comparison. Wigan paid just £6 million, Inverness £5 million, and Motherwell and Falkirk just £4 million each.

The highest average bill was paid by estates in West London, at £390,678.

Jane Morgan, business manager at Direct Line Life Insurance, comments: “Brits pay billions of pounds in inheritance tax each year with large variations across the country, often due to differences in property values.

“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.”

 George Hodgson, chief executive of STEP (a professional association for practitioners who specialise in family inheritance and succession planning), adds: “Rising property values mean that growing numbers of families need to think about inheritance tax and how this might affect them.

“Good advice from estate planning expert is essential, since there are some simple steps you can take to both minimise your tax bill and make it easier for your family to fund any tax due.”

See the table below for the top 10 IHT hotspots in the UK:

Postcode area Number of estates paying inheritance tax Tax liability (m) Average tax liability per estate
Guildford 658 £152 £231,003
South West London 655 £227 £346,565
Brighton 585 £92 £157,436
Kingston upon Thames 582 £123 £211,340
North London 502 £119 £237,052
Tunbridge Wells 493 £100 £202,840
Redhill 434 £80 £183,180
Reading 413 £75 £181,356
North West London 401 £153 £381,546
Bristol 396 £56 £140,404

Source: Direct Line, October 2018

HMRC raking in death duties

According to figures from the Office for Budget Responsibility (OBR) HMRC raked in £2.8 billion in inheritance tax in the first six months of the 2018/19 tax year.

This puts the IHT receipts on course for a new record high. The OBR estimates this tax year will see a record £5.4 billion for the government, up from £5.3 billion in 2017/18.

The Chancellor is facing increasing calls to reform the tax, which many see as unfair.

A review by the Office of Tax Simplification (OTS), ordered by Philip Hammond, is set to publish its results in the coming days which may colour potential changes to in his Autumn Budget.

Sean McCann, chartered financial planner at NFU Mutual, comments: “The OTS report on inheritance tax is imminent and it’s likely the Chancellor will want the recommendations to be part of his Budget considerations.

“Inheritance tax is deeply unpopular and fiendishly complicated. Recent changes have just added to the problem and in many instances the complexity of the rules means that families are missing out. These numbers show people are passing on more and more to the taxman rather than their loved ones.”

The threshold for inheritance tax has not moved since 2009. It kicks in on any estate worth more than £325,000, after which the value is taxed at 40%.

Since the threshold has not moved in a decade, every year more and more people are affected as average estate values rise.

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Leave a comment

IHTax

IHTax
IHTax
I agree the country needs it to function, but the family allowances are good, but unfair to single persons with
no direct family left.
I am a single pensioner and the help and kindness i receive from close friends is enormous.
How nice if I could leave more to them.
Oh well !!!
Simon