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Are people in your area paying the most IHT?

We take a look at how much the taxman takes from estates in different parts of the country, and suggest some ways to reduce liability.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Inheritance tax continues to be a great earner for the Treasury. Receipts have doubled in the last 10 years, with a record £5.4bn paid to the taxman last year.

The average UK IHT bill for those liable to a charge stands at a whopping £180,000, but people in London and the South East are paying even more.

Higher property values, the rising stock market and growing levels of cash savings, combined with the freezing of the IHT allowance since 2009, are all likely causes of the increase in IHT receipts.

We spend our lives paying taxes, yet the government continues to benefit at the end. Most of us want to make sure our loved ones are left at least a little bit better off as a result of our life.

It’s a gloomy subject, but it’s often said that death and taxes are the only certainties in life. Thanks to IHT, they have a tendency to turn up at the same time. So it's a good idea to have a plan in place.

And with the chance of a new government changing IHT rules, a plan could be even more important.

Are people in your area paying more or less than the UK average?

Area Average IHT bill
UK £180,000
London £226,000
South East £187,000
Northern Ireland £170,000
Yorkshire and the Humber £170,000
Scotland £168,000
South West £164,000
East Midlands £164,000
West Midlands £163,000
East of England £159,000
North West £139,000
North East £131,000
Wales £127,000

Source: HMRC Inheritance Tax Statistics, 2016/17 tax year (the most recent regional figures available)

The good news

With our help you could reduce or remove any IHT liability altogether. You could save your loved ones thousands of pounds.

The first step is to get to grips with the basics. There are plenty of simple steps you can take to pay less inheritance tax. You can find expert hints and tips in our guide to saving inheritance tax. Remember this article and our guide don’t give personal financial advice.

Download your copy

For example, gifting can be a great way to give children or grandchildren a great start in life, while reducing the future value of your estate for inheritance tax purposes.

Everyone has the following tax-free allowances for making gifts:

Annual exemption – in each tax year, you can make a gift up to the annual exemption of £3,000. On top of this, any unused exemption from the previous tax year can also be used – so up to £12,000 per couple can be gifted in this way.

Gifts from income – you can make regular gifts out of income which will be completely exempt from any future IHT liability. These gifts must be from your post-tax income, made habitually, and leave you with enough income to maintain your standard of living.

Marriage gifts – parents and grandparents can make one-off gifts on the marriage of children or grandchildren (up to £5,000 and £2,500 respectively). If you aren’t a parent or grandparent, you can still use this exemption to gift up to £1,000.

Small gifts – in each tax year you can gift up to £250 to any number of people completely, as long as they haven’t received a gift which uses another exemption.

Donations to charities or political parties – gifts to these types of organisation, either during your lifetime or via your will, are exempt from inheritance tax.

Want to talk it through?

If you think you could be affected by IHT one thing is certain, the sooner you act the better placed you are to reduce the potential impact.

Tax rules and benefits are constantly changing and their effect depends on your circumstances, our specialists can ensure you’re up to date and are making the most of your personal allowances.

We won’t waste your time or money. Book your call back and we’ll help you understand whether you’ll be affected, and whether you could take action to reduce it. If it’s right for you, we’ll book your free initial consultation with a specialist financial adviser.

There’s no pressure to take advice, but if you choose to do so there will be a charge, which we’ll discuss with you.

If you’d like to talk to us about IHT:

book your call

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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