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Average IHT bill nears £180,000

Estates in London and the South East pay the most

The average inheritance tax (IHT) bill is nearing £180,000, government figures show.

Data published by HMRC shows nearly £5.4bn was collected in inheritance tax in 2018/19, a rise of 57% in five years.

London and the South East are contributing a vast proportion of the bill. The average IHT bill in London was more than £225,000 last year, compared to just over £125,000 in Wales.

Sean McCann, Chartered Financial Planner at NFU Mutual, said the complexity of IHT rules leaves many fearful and confused about how best to pass their wealth onto their families.

“A simplification of IHT is long overdue,” he argued. “Many of the exemptions and rules on gifting haven’t changed in more than 30 years and are poorly understood, we need a simpler system to help families plan their finances.” He added that HMRC has become more willing to challenge valuations and investigate claims for reliefs.