The average inheritance tax (IHT) bill in the UK has climbed over £200,000, new government figures have revealed.
HMRC data showed were 22,100 deaths in the 2018/19 tax year that resulted in an IHT bill, totalling £4.63bn at an average amount of £209,502. This figure is up 6% from £197,521 the year before.
Just 3.7% of deaths in the UK resulted in an IHT bill in 2018/19, but this percentage is expected to rise following Rishi Sunak’s decision to freeze the tax-free allowances for the next five years, which the Chancellor hopes will help offset the costs of the COVID-19 pandemic.
London was the region with the highest average bill at £271,820, while the lowest average was found in Wales (£155,963).
Commenting on the figures, NFU Mutual chartered financial planner, Sean McCann, said: “IHT is feared by many but paid by relatively few. But with the average bill in excess of £200,000, it can make a significant dent in a family’s wealth for those that do get caught in the net.
“With the tax-free allowances frozen for the next five years, rising asset prices and a heated housing market, a growing number of families will be impacted.
“It’s critical that families concerned about being caught by IHT seek advice as early as possible. The earlier you plan the more options you have to mitigate any potential bill.”
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