{"id":169527,"date":"2025-06-09T06:10:12","date_gmt":"2025-06-09T06:10:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/169527\/"},"modified":"2025-06-09T06:10:12","modified_gmt":"2025-06-09T06:10:12","slug":"cities-facing-inheritance-tax-shock-revealed-bereaved-facing-big-bills-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/169527\/","title":{"rendered":"Cities facing inheritance tax shock revealed &#8211; bereaved facing big bills | Personal Finance | Finance"},"content":{"rendered":"<p>Thousands more grieving families are set to be dragged into Britain\u2019s most hated tax \u2013 with small cathedral cities and overlooked northern towns emerging as hotspots.<\/p>\n<p>A damning new report lays bare the full impact of frozen thresholds and surging property prices, revealing that the number of estates hit by Inheritance Tax (IHT) will rocket by 50% by the end of the decade.<\/p>\n<p>According to critics these, combined with death tax reforms, are a stealth raid on \u201cmiddle Britain\u201d \u2013 punishing families who\u2019ve worked hard, saved responsibly and now face six-figure tax bills simply for passing wealth on to their children.<\/p>\n<p>Legal experts at Irwin Mitchell, who analysed <a href=\"https:\/\/www.express.co.uk\/latest\/hmrc\" data-link-tracking=\"InArticle|AutoLink\" target=\"_blank\" rel=\"noopener\">HMRC<\/a> figures from 177,000 estates across all 121 UK postcode areas, say that once-affordable cities like Hull and Carlisle are now on track to become IHT flashpoints.<\/p>\n<p>Meanwhile, wealthy but small cathedral cities such as Truro and Salisbury, with fewer than 70,000 residents combined, are predicted to see the sharpest rises in taxable estates.<\/p>\n<p>Andrea Jones, head of Irwin Mitchell\u2019s Private Client Advisory, warned: \u201cThese are places that have traditionally been seen as more affordable, but rising property values, regional investment, and demographic shifts are changing that.<\/p>\n<p>&#8220;It shows that IHT is no longer just a concern for wealthy families \u2013 it\u2019s becoming a reality for middle-income households across the UK. The geography of wealth is evolving, and inheritance tax is following it.\u201d<\/p>\n<p>The findings come as the Treasury prepares to rake in \u00a39 billion a year from IHT by 2027 \u2013 up from \u00a35.5 billion in 2021\/22.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Biggest Inheritance Tax Risers \u2013 2021\/22 to 2026\/27<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Town Estimated increase Average IHT bill 2026\/27<\/strong><\/p>\n<p>Truro 195% \u00a3129,200<\/p>\n<p>Salisbury 92% \u00a3175,300<\/p>\n<p>Carlisle 72% \u00a3173,900<\/p>\n<p>Hemel Hempstead 70% \u00a3240,000<\/p>\n<p>Slough 65% \u00a3321,200<\/p>\n<p>York 65% \u00a3173,900<\/p>\n<p>Southampton 65% \u00a3216,400<\/p>\n<p>Cambridge 64% \u00a3191,100<\/p>\n<p>Hull 63% \u00a3137,900<\/p>\n<p>Oxford 57% \u00a3196,200<\/p>\n<p>Ms Jones said: \u201cSmaller cities are now emerging as new hotspots.<\/p>\n<p>\u201cThese areas, traditionally seen as more affordable, are experiencing rising property values and increased investment, making them significant areas of IHT exposure.\u201d<\/p>\n<p>Even as London remains the epicentre of inheritance tax collections, with \u00a32.6 billion expected annually by 2026\/27, the rapid rise elsewhere is triggering alarm.<\/p>\n<p>Key findings include:<\/p>\n<p>* The number of estates paying IHT will surge from 24,000 to more than 37,000 within five years.<\/p>\n<p>* Nine in ten postcode areas will see increases in taxable estates.<\/p>\n<p>* In Greater London, the number of estates paying IHT is expected to hit 9,400, with average bills of \u00a3275,000, and as high as \u00a3340,000 in Inner London.<\/p>\n<p>* Leeds, Manchester, and Birmingham are all forecast to see double-digit rises in taxable estates.<\/p>\n<p>Ms Jones said: &#8220;The increase in Inheritance Tax liabilities across the UK is a significant concern for many families.&#8221;<\/p>\n<p><strong><br \/>Why are more households being dragged into IHT?<\/strong><\/p>\n<p>* Frozen tax thresholds &#8211; The nil-rate band (the amount you can pass on tax-free) has been frozen at \u00a3325,000 since 2009.<\/p>\n<p>The residence nil-rate band (an extra allowance if you leave your home to direct descendants) is capped at \u00a3175,000.<\/p>\n<p>Despite property prices rising significantly over the last decade, the thresholds haven\u2019t been adjusted, so more estates now exceed them.<\/p>\n<p>The freeze was extended until 2030 by the current government, dragging in even modest estates.<\/p>\n<p>* Rising property prices &#8211; In many areas, house prices alone are enough to push an estate over the threshold.<\/p>\n<p>Even families who don\u2019t consider themselves wealthy are now falling into the IHT net, especially in the South East and London.<\/p>\n<p>* Investment growth &#8211; Inherited ISAs, pensions, and investment portfolios have grown in value.<\/p>\n<p>With the stock market and AIM-listed shares increasing over time, many estates now include significant financial assets.<\/p>\n<p>* Relief reforms coming &#8211; From April 2026, Business Property Relief and Agricultural Property Relief will be capped at \u00a31 million for full 100% exemption.<\/p>\n<p>Anything above that threshold will only get 50% relief, hitting farmers, business owners, and landowners.<\/p>\n<p>* Inherited pensions to be taxed &#8211; From April 2027, inherited pensions will fall under IHT \u2013 a major change, as pensions have traditionally been passed on tax-free.<\/p>\n<p>ends<\/p>\n","protected":false},"excerpt":{"rendered":"Thousands more grieving families are set to be dragged into Britain\u2019s most hated tax \u2013 with small cathedral&hellip;\n","protected":false},"author":2,"featured_media":169528,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,1016,3121,3122,3124,3123,2499,16,15],"class_list":{"0":"post-169527","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-hmrc","11":"tag-inheritance-tax","12":"tag-inheritance-tax-2025","13":"tag-inheritance-tax-latest","14":"tag-inheritance-tax-news","15":"tag-personal-finance","16":"tag-uk","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114651924048354315","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/169527","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=169527"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/169527\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/169528"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=169527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=169527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=169527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}