London pays 50% of all IHT

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London and the South East pay half of all IHT say Harris & Co accountants Northampton, empasising the need for good tax planning. The 2010-11 figures show  IHT receipts totalled £2.6bn from approximately 15,600 estates. London and the South East accounted for £1.4bn, even though only 42% of liable estates (a total of around 6,500) were in these two regions.

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).

The UK’s average IHT bill was nearly £166,000, but the Prudential’s analysis suggests considerable regional variation. The lowest average (£126,000) was in Wales, followed by the  North East (£130,000), North West (£130,990),  Northern Ireland (£135,000), and West Midlands (£136,700).

In comparison, the South West averaged £155,300 and the  East of England £156,900, while the figure for the South East of England was £174,000 and London topped the table at  £234,000.

Graeme Robb, a tax specialist at Prudential, said: ‘These figures reveal that a huge amount of inheritance tax is paid by a relatively small number of people. Nevertheless, it is likely that an average bill of more than £160,000 would be unwelcome for any family.’

HMRC reviewed nearly 260,000 estates in the 2010-2011 tax year, meaning inheritance tax was paid by only 6% of estates. The Prudential says this figure is similar to the two previous years, but much lower than years between 2005 and 2008, when it calculates more than 10% of estates were liable for inheritance tax.

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