Top 10 areas with the biggest inheritance tax bills

The rich London area trio are dealing with a median inheritance tax invoice of over £1 million per property, new figures reveal.

Kensington is on the prime of the UK area’s record with the most important inheritance tax (IHT) payments, with properties paying common invoices for £1,375,000.

Chelsea and Fulham observe second (common IHT bill £1,114,583) adopted by cities in London and Westminster (£1,075,949).

An evaluation of HMRC information by legislation agency Irwin Mitchell exhibits that the capital controls the highest ten record, however two areas exterior of London have emerged.

The IHT-paying properties in Torridge and West Devon face a median bill of £534,247, making them eighth on the record. In the meantime, beneficiaries of Manchester’s Altrincham and Sale West property had been hit by a £451,220 levy, making it tenth.

“We have been working arduous to get into the world,” commented Andrea Jones, nationwide head of Irwin Mitchell’s non-public shopper advisory workforce. “It underscores the significance of aggressive actual property planning, particularly in areas with high-value actual property. There may be additionally the complexity of managing inheritance tax publicity, because the asset worth and asset portfolio proceed to rise.”

The corporate expects the variety of IHT-responsible properties to extend from 4% to 7% by 2028, with the annual IHT invoice in Better London is predicted to extend by 54% from £1.7 billion to £2.6 billion.

An evaluation by insurance coverage firm NFU Mutual reveals that London and the southeast pay extra inheritance taxes than each Scotland, Wales and Northern Eire.

The London and Southeast properties paid £2.98 billion, £6.7 billion raised by UK inheritance tax between 2022 and 2023.

In accordance with NFU Mutual, the typical inheritance tax property in London was charged £300,000.

This determine comes as the federal government prepares to tax pension pots as a part of its inheritance tax crackdown on April 2027, however IHT will start reforms to rescue agricultural and enterprise belongings subsequent April.

Shawn McCann, licensed monetary planner at NFU Mutual, commented: “Inheritance tax is affecting an increasing number of households as they’ll hand over shares of household properties the place the £325,000 tax-free allowance and the £175,000 allowance stay frozen till 203030.

“The proposal to deliver pensions to the inheritance tax internet beginning in April 2027 will solely speed up the variety of affected households.”

Prime 10 areas with the best common IHT invoices per actual property

Listed here are the highest 10 places for common IHT paid per property in 2022-23:

Supply: HMRC Inheritance Tax Returns Analysed by Irwin Mitchell in July 2025. Notice that the numbers are the typical of the true property in that space that you simply paid in your IHT. They exclude any property that was not answerable for IHT

Regional: In contrast with inheritance tax liabilities

Supply: NFU Mutual, utilizing HMRC Inheritance Tax Legal responsibility Statistics. Estimated variety of actual property answerable for IHT within the 2022-23 tax yr.

An evaluation of the NFU mutually unique exhibits that roughly 12,000 households in London and the Southeast paid IHT in 2022-23. That is simply 334 in Northern Eire and 555 within the northeast.

London paid nearly triple inheritance taxes in step with the identical tax yr as Scotland, Wales and Northern Eire.

General, based on HMRC, annual inheritance tax receipts have elevated from £3.3 billion in 2005-2006 to £8.2 billion in 2024-2025.

An increasing number of individuals searching for IHT recommendation

Wealth managers and monetary advisors report a rise within the variety of individuals searching for IHT recommendation.

McCann from NFU Mutual observes: “There was a speedy rise in calls from individuals searching for inheritance tax recommendation, significantly in gentle of proposed modifications to agricultural property reduction and enterprise property reduction proposals, significantly from April subsequent yr.

Rathbones, RBC Brewin Dolphin, and St. James’s Place tells MoneyWeek that they noticed a rise in pension savers frightened about future IHT modifications.

Some retirees at the moment are withdrawing extra money from their pension pots to scale back the dimensions of their properties and thus scale back potential IHT payments.

Wealth managers warn that vital unintended penalties can happen, similar to working out of cash throughout retirement or being hit by earnings tax on withdrawal.

Irwin Mitchell can also be involved concerning the sensible implications of presidency inheritance tax reform.

The corporate warns that the change may “flip right into a authorized and emotional minefield, particularly if the pension beneficiary differs from the true property beneficiary. Enforcers are pressured to make use of actual property belongings, together with probably household properties, to pay the tax invoice, and may search a refund from pensioners who aren’t legally obligated to cooperate.”

We are going to uncover the myths of six inheritance taxes and think about 9 methods to scale back inheritance tax payments with separate guides.