Londoners hit hardest by tax on inheritance
LONDON and the south east of England are forking out 50 per cent of Britain’s inheritance tax bills, fuelling fears that the levy has turned into yet another tax on the capital.
Londoners alone shell out as much inheritance tax as the north east, north west, east midlands and west midlands, Scotland, Wales and Northern Ireland put together.
London and the south east contributed half of the country’s £2.6bn in the 2010-2011 financial year, paying £1.3bn to the Treasury, according to figures revealed this morning by analysis of official tax data by Prudential.
The average UK estate that is liable for inheritance tax received a massive £166,000 bill in the same year. In London, the value is even higher, with a typical payment reaching £234,000.
“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,” said Graeme Robb, one of Prudential’s tax specialists.
The group has also found that the number of inheritances that were large enough to qualify for the tax has dropped significantly in the years since the financial crisis.
Between 2005 and 2008, more than 10 per cent of estates in the country were eligible to pay, but the number was reduced to just six per cent in 2010-2011.