Skip to content

Historic Home County pays more inheritance tax than all of Scotland

Surrey is the UK’s Inheritance Tax capital, with the county’s residents paying £259m in IHT in 2017/18*, shows research by the leading private wealth law firm, Boodle Hatfield.

The UK’s Top 10 Inheritance Tax (IHT) hotspots last year were all in London and the South East – see table. Following Surrey in second place out of 143 areas is Hertfordshire (£157m), with Sussex (£155m) coming in third, whilst Kensington & Chelsea takes fourth place (£140m).

London boroughs accounted for the highest proportion of inheritances that resulted in an IHT charge. 15.1% of inheritances in Wandsworth incurred IHT, followed by 14.56% in Kensington, Chelsea, Hammersmith & Fulham and 14.38% in Barnet.

Boodle Hatfield says that rising house prices in the Capital and the South East has resulted in more estates passing the threshold for paying IHT.

The average property price in Surrey is £445,254, compared to the UK average of £231,835**. Property prices in the county have risen 54% since 2010, whereas the average price rise across the UK was just 40% over the same period. This rise was even steeper in Kensington and Chelsea, which is home to some of the UK’s most expensive real estate. The average property saw a 70% increase.

The IHT threshold of £325,000 for an individual estate has not been increased since April 2009, so rising property values have resulted in a much higher proportion of estates being dragged into the taxable band.

The value of IHT charged on estates varies drastically throughout the UK. London has the highest average charge at £245,300 due to its high property costs. By contrast, the average charge of IHT in the North East of England is £146,800 and just £133,500 in Wales due primarily to the lower cost of property in these regions.

Geoffrey Todd, Partner at Boodle Hatfield says: “Towns such as Virginia Water and Cobham that boast luxury properties in close proximity to London and Heathrow, have contributed to Surrey becoming the UK’s top IHT hotspot.”

“Affluent regions such as London and the South East pay the lion’s share of IHT but what was intended as a tax on the very wealthy has ended up affecting a much wider range of taxpayers, with owners of even modest properties in those areas now liable.”

“It is not just the super-rich who pay IHT nowadays.”

IHT by area, 2020
*HMRC: Most recent year for which data is available

**Land Registry

 This article was first published in The Telegraph in October 2020.

How to find us:
London Bankside

Bankside Office

240 Blackfriars Road
London
SE1 8NW
DX 53 Chancery Lane

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

London Mayfair

Mayfair Office

6 Grosvenor Street
London
W1K 4PZ

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

Oxford

Oxford Office

6 Worcester Street
Oxford
OX1 2BX

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

Bankside Office

240 Blackfriars Road
London
SE1 8NW
DX 53 Chancery Lane

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

Get directions

Contact us