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Is a bill for £166,000 on its way to your family?

by | May 1, 2014 | Estate Planning, Tax News

Postitstax3

Estates liable for Inheritance Tax in the UK in 2010-2011 faced a bill of nearly £166,000 on average, according to new analysis of HMRC data by Prudential.

The study, based on the latest publicly available regional data on tax receipts, shows that in the 2010-2011 tax year, inheritance tax was paid on around 15,600 estates with a total bill of £2.6 billion.

Big bills in London and the South East

London and the South East of England have been identified as the UK’s inheritance tax hotspots.

The £1.3 billion in receipts from London and the South East represented half of all the inheritance tax paid nationally, even though only 42 per cent of liable estates (a total of around 6,500) were in the two regions.

Property boosts IHT bills

Unsurprisingly, given that property values in the capital and the South East of England tend to be higher than elsewhere, the average amount paid in inheritance tax in those areas was considerably more than in other parts of the country.

Whereas the average estate liable for inheritance tax in Wales faced a bill of £126,000, and in the North East of England £130,000, the figure for the South East of England was £174,000 and in London, a whopping £234,000.

Regional differences

In both Northern Ireland and the North East of England only 200 estates were liable for inheritance tax, yet many individual counties in the South East of England saw far more estates above the threshold – including Surrey (810), West Sussex (530) and Hampshire (500).

HMRC

HMRC reviewed nearly 260,000 estates in the 2010-2011 tax year, meaning inheritance tax was paid by only 6 per cent of estates, a figure similar to the two previous years. This is much lower than years between 2005 and 2008, when more than 10 per cent of estates were liable for inheritance tax.

Want some help?

Many individuals can legitimately reduce their inheritance tax bill through careful tax planning. With our help you can leave more of their wealth to your nearest and dearest.

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Sources: www.pru.co.uk

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