Location will cost families tens of thousands of pounds in inheritance tax (IHT) liabilities as house price rises push them above the inheritance tax threshhold.
HSBC said many families had been left facing the full IHT rate of 40% on properties they had inherited, after rising prices had taken them over the government limit.
The IHT threshold now stands at £255,000, and tax is payable on the value of someone’s estate over and above that. HSBC said 33 London boroughs and three other areas in England and Wales had average property prices above that, making many families immediately liable for IHT.
Phil Dillnutt, managing director, private clients at HSBC, said: ‘Any increase in IHT threshold is usually linked to the Retail Price Index (RPI). However house price increases far outstripped any increases in RPI last year.’ Dillnutt added: ‘This is a complex area of tax, but expert advice and estate planning can reduce IHT bills.’
Countrywide, the top five hotspots are Windsor and Maidenhead, Surrey, Buckinghamshire, Greater London, and Wokingham. In London, they are Kensington and Chelsea, City of Westminister, Bromley, Hammersmith & Fulham, and Richmond upon Thames.
