Kingsley Napley unveils the ‘Inheritance Tax Premier League’ (ITPL)

18 October 2021

An analysis of Government inheritance tax data by law firm Kingsley Napley shows the geographical dispersal of estates hit by inheritance tax bills.
 

Based on the latest HMRC statistics available of inheritance tax (IHT) receipts (see source), Kingsley Napley can reveal:

  • Barnet comes top of the league by volume of estates hit by IHT (table 1);
  • Kensington and Chelsea leads by average value of IHT paid (table 2);
  • Contrary to popular belief, it’s not simply London and the Home Counties that pay higher IHT – Stratford-upon-Avon, Winchester, Devon and Dorset are hot spot areas too;
  • Average IHT bills range from £65k in Walsall to over £1m in Kensington;
  • Huge range in London from average of £83k in Newham to over £1m in Kensington.

The figures were remarkably consistent with the same analysis for the preceding tax year except:

  • Chichester, Leeds and St Albans appear in the top 20 ranking of volume of estates hit by IHT (table 1) unlike in the latest figures;
  • South Norfolk, Plymouth and Brentwood appear in the top 20 ranking for average value of IHT (table 2) unlike in the most recent table.

Commenting on the analysis, James Ward, Head of Private Client at Kingsley Napley, says:

It’s not simply the wealthiest families that pay the most IHT. As our ranking shows some families are better at estate planning than others. With recent property and share price increases and taxes rising elsewhere, IHT remains an area where something can be done to mitigate the eventual   liability due. IHT is one Premier League you don’t want to be top of.”

In March this year the Government announced it was freezing the £325,000 nil-rate band for inheritance tax and £175,000 residence nil rate band until April 2026. There is speculation the Chancellor may seek to tighten IHT rules in his forthcoming October Budget, although other areas of the tax spectrum such as CGT reform would deliver greater revenues to the Treasury.

Kingsley Napley has seen an increasing number of inquiries from those aged 65+ with growing estates who want to take legitimate steps to reduce their inheritance tax liabilities.

James Ward says there are five main ways to go about this, namely:

  • Capital gifting: Sizeable transfers seven years before you die;
  • Excess income gifting: Regular contributions to school fees or a mortgage can also help;
  • Exemptions: Make sure to use all your nil rate bands and consider business relief. Although complex, the latter can lead to big savings.
  • Life insurance: Consider this being paid out to family members. Let the insurance pay the tax.
  • Skiing: Spending the Kids Inheritance! E.g. on good wine, nice food, holidays and trips out!

James Ward adds:

Those living in IHT hotspots should strongly consider all of these steps and more to avoid ranking at the top of our Inheritance Tax Premier League in future. It is always wise to have a regular review of estates and inheritance plans to ensure tax-efficiency in the event of death.”

The Kingsley Napley Inheritance Tax Premier League analysis is as follows:

1. Rank by Number of IHT Estates – 2018/19 and 2017/18 Tax Years

2018/19 Rank Area Number Amount £m Average £k
1 Barnet 316 92 291.1
2 Wiltshire 261 60 229.9
3 Edinburgh, City of 254 54 212.6
4 Bromley 249 52 208.8
5 Cornwall 245 49 200.0
6 Elmbridge 197 49 248.7
7 Richmond upon Thames 191 47 246.1
8 Wandsworth 176 51 289.8
9 Ealing 173 32 185.0
10 Croydon 169 29 171.6
11 Cheshire East 165 30 181.8
12 Westminster 159 130 817.6
13 Kingston upon Thames 159 47 295.6
14 Bristol, City of 159 25 157.2
15 Enfield 159 24 150.9
16 Merton 150 41 273.3
17 Brighton and Hove 149 27 181.2
18 Birmingham 148 31 209.5
19 Camden 145 64 441.4
20 Kensington and Chelsea 144 154 1,069.4
2017/2018 Rank Area Number Amount £m Average £k
1 Barnet 339 119 351.0
2 Wiltshire 281 61 217.1
3 Bromley 260 40 153.8
4 Edinburgh, City of 258 61 236.4
5 Richmond upon Thames 239 53 221.8
6 Wandsworth 233 57 244.6
7 Cornwall 222 44 198.2
8 Croydon 209 28 134.0
9 Enfield 203 29 142.9
10 Cheshire East 200 45 225.0
11 Birmingham 199 29 145.7
12 Elmbridge 191 53 277.5
13 Ealing 186 35 188.2
14 Brighton and Hove 175 35 200.0
15 Chichester 166 44 265.1
16 Reigate and Banstead 159 40 251.6
17 Camden 158 134 848.1
18 Waverley 157 37 235.7
19 Leeds 153 24 156.9
20 St Albans 153 25 163.4

2. Rank by Average Value of IHT Estates – 2018/19 and 2017/18 Tax Years

2018/19 Rank Area Number Amount £m Average £k
1 Kensington and Chelsea 144 154 1,069.4
2 Westminster 159 130 817.6
3 Camden 145 64 441.4
4 Stratford-on-Avon 79 34 430.4
5 South Oxfordshire 106 39 367.9
6 Babergh 44 16 363.6
7 Winchester 104 37 355.8
8 West Devon 35 12 342.9
9 Hammersmith and Fulham 104 35 336.5
10 Test Valley 52 17 326.9
11 Hertsmere 100 32 320.0
12 Waverley 139 44 316.5
13 Chichester 109 33 302.8
14 Kingston upon Thames 159 47 295.6
15 West Dorset 95 28 294.7
16 Barnet 316 92 291.1
17 Wandsworth 176 51 289.8
18 South Bucks 107 31 289.7
19 Islington 80 23 287.5
20 Merton 150 41 273.3
2017/18 Rank Area Number Amount £m Average £k
1 Camden 158 134 848.1
2 Kensington and Chelsea 139 110 791.4
3 Westminster 149 68 456.4
4 Amber Valley 33 13 393.9
5 Sevenoaks 117 42 359.0
6 Barnet 339 119 351.0
7 Winchester 112 39 348.2
8 South Norfolk 55 19 345.5
9 Waveney 49 16 326.5
10 Chiltern 129 42 325.6
11 Brentwood 69 22 318.8
12 Harborough 36 11 305.6
13 Plymouth 43 13 302.3
14 Aberdeenshire 73 22 301.4
15 South Northamptonshire 37 11 297.3
16 Cotswold 85 24 282.4
17 Islington 75 21 280.0
18 Elmbridge 191 53 277.5
19 Tandridge 87 24 275.9
20 West Oxfordshire 73 20 274.0

NOTES TO EDITORS

The Kingsley Napley Inheritance Tax Premier League is based on HMRC data from Inheritance Tax Returns published on 29 July 2021 (Source: www.gov.uk/government/statistics) which relates to inheritance tax bills settled in 2018/19, and includes comparable figures for the 2017/18 tax year. The numbers of estates liable to tax passing on death are estimates and the numbers given are by Local Administrative Units (LAU) Level 1.

 

About Kingsley Napley

Kingsley Napley LLP is a leading UK based law firm providing expertise for our clients’ business and private lives, when it matters most. We advise in the following areas: employment law, private client advisory, public law, criminal defence litigation, corporate and commercial, dispute resolution, family law, medical negligence & personal injury, regulatory, real estate, construction and immigration.

Kingsley Napley is ranked as the number one UK law firm to work for in the Best Companies to Work List 2021 list as cited here.

The firm ranked 73 in The Lawyer’s Top 200 UK Law Firms 2020 list by revenue.

 

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