The average inheritance tax bill has climbed to more than £200,000 according to the latest government figures.
There were 22,100 deaths in 2018-19 that resulted in an inheritance tax bill, and the average bill was £209,502, up 6 per cent from £197,521 the year before, according to HM Revenue & Customs data.
The region with the highest average bill was London with £271,820, and the region with the lowest average bill was in Wales with £155,963.
Only 252 people paid IHT in Northern Ireland but paid £40m between them.
Only 3.7 percent of UK deaths resulted in an IHT bill in 2018-19 but that percentage is expected to rise due to the chancellor’s decision to freeze the tax-free allowance for the next five years to help pay the coronavirus bill.
|Number of families||Amount||Average bill|
|Yorkshire and the Humber||979||£171m||£174,668.03|
|East of England||2,520||£504m||£200,000.00|
Source: HMRC/NFU Mutual
According to Sean McCann, chartered financial planner at NFU Mutual, more and more families are expected to pay IHT over the next five years, for those with assets above the tax-free allowances, but he said there are some simple ways to reduce your future bill.
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", McCann added.
Saksha Menezes is an intern with FTAdviser