London pays three times as much inheritance tax as Scotland and Wales

Families in London have paid triple the amount of inheritance tax than those in Scotland, Wales and Northern Ireland combined.

Estates of those who died in the capital paid £1.53 billion in the 2022-23 tax year, according to the latest HM Revenue & Customs data. This compares with the total £525 million that was handed over by estates in Scotland, Wales and Northern Ireland.

The average bill in London was £300,000, compared with £213,000 nationally. Some £6.175 billion was paid by estates in England, and the UK total was £6.7 billion.

The figures come as Rachel Reeves is said to be considering an inheritance tax crackdown in the autumn budget, which could involve a cap on financial gifts given to family members while still alive.

The surge in inheritance tax payments is down to rising house prices and frozen inheritance tax allowances, which have pushed thousands more families into the tax net, delivering a record windfall for the Treasury.