Regulation  

Pru: IHT hits London and southeast hardest

Half of the UK’s £2.6bn in total revenue came from London and the southeast of England, according to the insurer, which analysed data from HM Revenue & Customs. Both regions accounted for as much of the revenue as the rest of the UK put together.

The average estate liable for inheritance tax in Wales paid £126,000, while in the northeast of England the average estate paid £130,000.

This compares to £174,000 for the southeast of England, and £234,000 in London, reflecting higher property values in the south.

Graeme Robb, a tax specialist for Prudential, said: “These figures reveal that 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.”

Andrew Dawson, IFA at Cornwall-based Coast to Coast Financial Planning Services, said: “It’s a shame so much has been paid out, because with a bit of forward planning, most inheritance tax could be avoided.”

Key statistic: £2.6bn in IHT was paid in 2010/11