Families in London and the South East are bearing the brunt of the UK's inheritance tax burden, contributing nearly half of all receipts, according to a stark new analysis. The findings, based on the latest available data, highlight how rising property values are pulling more ordinary households into the tax net.
The London and South East Inheritance Tax Divide
The research, conducted by TWM Solicitors, shows a pronounced regional disparity. Londoners paid the greatest share of the levy at 23 per cent, with the South East close behind at 22 per cent. Combined, these two regions account for 45 per cent of the nation's total inheritance tax take.
This contrasts sharply with other parts of the country. The South West paid 11 per cent, while the North West contributed just five per cent and Yorkshire four per cent. The analysis pinpoints specific areas with the heaviest burdens, with Kensington estates facing the UK's highest average bills of £1.4m each. Richmond Park recorded the highest number of liable estates, with 184 in the neighbourhood.
Other notable areas include Wimbledon, where bills averaged £566,000, and Guildford, with an average of £302,000.
Property Prices: The Key Driver
The primary force behind these escalating bills is the sustained climb in property prices, particularly in the South of England. As house values increase over time, more families find their estates exceeding the inheritance tax threshold, a scenario once considered the preserve of the very wealthy.
Duncan Mitchell-Innes, partner and deputy head of private client at TWM Solicitors, commented: “Inheritance tax is no longer a concern just for the very wealthy – it’s increasingly hitting ordinary families as property prices rise. Families in London and the South East are shouldering nearly half of the nation’s IHT burden.”
Widowed Women Disproportionately Affected
The report uncovered a significant demographic imbalance, revealing that widowed women are disproportionately impacted by inheritance tax. They account for 34 per cent of all IHT bills, compared to just 22 per cent for widowed men.
This inequality stems from women's longer life expectancy and, critically, a frequent failure in estate planning. Many couples do not adequately plan or update their wills, leading to valuable tax allowances being lost upon the first death and leaving the surviving spouse, often the wife, with a larger potential tax liability.
Mitchell-Innes added that this issue requires attention, stating the government should recognise that widowed women “are hit hardest by the tax.”
The data underscores a system where geographic location and property wealth increasingly determine exposure to inheritance tax, with London and the South East's homeowners and widowed women facing the greatest financial impact.
