Families in London pay half the country's inheritance tax

Latest figures reveal that Estates liable for inheritance tax paid an average of £170,000 in the years 2012-2013, up from £165,000 the previous year. This increase is broadly in line with UK house prices, which rose by 2.6 per cent in the year to April 2013.

Estates in London and the South East accounted for a massive fifty per cent of all the inheritance tax paid by families in the UK, with the average bill in the capital being £236,000 – 38 per cent above the national average.

Although the average amount of inheritance tax payable has risen, the number of families which must pay the tax has remained stable. Data from Prudential shows that just 6 per cent of Estates paid inheritance tax in 2012-13, a proportion which has remained stable for five years.

Every individual may pass on £325,000 of assets, tax free. Married couples and civil partners may pass on double this amount - £650,000 – before paying any tax. Any assets above this amount incur a tax rate of 40 per cent.

The good news is that although house prices are destined to rise, the proportion of Estates likely to have to pay the tax is predicted to fall, due to changes surrounding pensions and home ownership.

As part of the pension freedoms that came into force in April this year, individuals can now pass on their unused defined contribution pension to anyone they choose, without paying the 55 per cent tax charge that previously applied.

If you have any questions regarding inheritance tax, contact our Ellesmere Port solicitors who will be happy to discuss your circumstances. Call us on 01606 834 824, or complete the enquiry form to the right and we will call you back.

Inheritance Tax Solicitors

Ellesmere Port & Willaston