Research briefing

The Inheritance Tax Postcode Lottery

Q: How much is inheritance tax forecast to raise?

The OBR estimated inheritance tax would raise 8.7 billion pounds in the 2025 to 2026 tax year and forecast receipts rising to 14.3 billion pounds by 2029 to 2030, with about 2.5 billion pounds of the later rise attributed to announced reforms. Forecasts are revised at each fiscal event.

Inheritance tax is a national tax collected from a small, geographically concentrated group of estates. This briefing maps where it falls across England and Wales, using HMRC, HM Land Registry and OBR data.

Written by the Fairchild Oldfield team · Research briefing · Last reviewed: July 2026

46%

Share of all UK inheritance tax paid by estates in London and the South East in the 2023 to 2024 tax year, from 11,120 taxpaying estates.

Source: HMRC, Inheritance Tax liabilities statistics commentary, published 30 July 2026.

Fewer than one in twenty deaths in the United Kingdom lead to an inheritance tax charge, yet the estates that do pay are clustered in a small number of places. In the 2023 to 2024 tax year, 30,400 estates incurred an inheritance tax charge, equal to 4.72% of UK deaths, and estates in London and the South East alone paid 46% of the total (HMRC, Inheritance Tax liabilities statistics, 2023 to 2024).

The phrase "postcode lottery" describes an outcome that depends heavily on where an estate is located, chiefly because the tax-free nil-rate band has been fixed at £325,000 since the 2009 to 2010 tax year while regional house prices have moved apart. This briefing sets out the verified figures, adds three clearly labelled derived measures that combine public datasets, and flags the limits of each number. All figures are dated and refer to England and Wales unless stated. This is general information and factual data reporting, not advice.

Executive summary

30,400 estates incurred an inheritance tax charge in the 2023 to 2024 tax year, equal to 4.72% of UK deaths (HMRC, 2023 to 2024).
The total inheritance tax liability was £7.03 billion in 2023 to 2024, up on the previous year even though the number of taxpaying estates fell (HMRC, 2023 to 2024).
London and the South East accounted for 11,120 taxpaying estates and £3.26 billion of liability in 2023 to 2024, or 46% of the UK total (HMRC, 2023 to 2024).
The average inheritance tax bill across taxpaying estates was £231,000 in 2023 to 2024, up about 9% (roughly £19,000) on the prior year; in London the average was about £297,000 (HMRC, 2023 to 2024).
The average UK house price was £270,000 in April 2026, ranging from £163,190 in the North East to £552,655 in London, a 3.4-times gap (HM Land Registry, UK House Price Index, April 2026).
Fairchild Oldfield estimate: in London, the South East and the East of England, the average home alone now equals or exceeds the entire single £325,000 nil-rate band; in the North East it fills about half of it Derived · model.
The nil-rate band is frozen at £325,000 until the end of the 2030 to 2031 tax year (5 April 2031), unchanged since 2009; the freeze was extended by a further year at Budget 2025 (26 November 2025), having previously been set to end in 2029 to 2030 (gov.uk, Budget 2025).
The OBR forecasts inheritance tax receipts rising to £14.3 billion by 2029 to 2030, driven by frozen thresholds, asset prices and reforms (OBR, as reported by BDO).

Key findings

Each finding below is a self-contained statement with a figure, a timeframe, a geography and a source. Derived figures produced by Fairchild Oldfield are labelled as estimates and explained in the original analysis section.

30,400 estates incurred an inheritance tax charge in the 2023 to 2024 tax year across the UK (HMRC, 2023 to 2024).
4.72% of UK deaths resulted in an inheritance tax charge in the 2023 to 2024 tax year (HMRC, 2023 to 2024).
Total inheritance tax liability reached £7.03 billion in the 2023 to 2024 tax year, UK-wide (HMRC, 2023 to 2024).
The South East had the most taxpaying estates of any region, 6,310, with £1.83 billion of liability in the 2023 to 2024 tax year (HMRC, 2023 to 2024).
London estates paid £1.43 billion of inheritance tax across 4,810 taxpaying estates in the 2023 to 2024 tax year (HMRC, 2023 to 2024).
The average inheritance tax bill per taxpaying estate was £231,000 in the 2023 to 2024 tax year, up about 9% on the prior year (HMRC, 2023 to 2024).
The North East of England, Northern Ireland and Wales had the fewest taxpaying estates of any UK areas in the 2023 to 2024 tax year, which HMRC links to lower property values (HMRC, 2023 to 2024).
In the 2022 to 2023 tax year, the most recent year with a reported nation-level breakdown, Scotland had 1,680 taxpaying estates (£331 million), Wales 1,030 (£155 million) and Northern Ireland 334 (£40 million) Prior year (HMRC data via NFU Mutual, 2022 to 2023).
Yorkshire and the Humber had 1,460 taxpaying estates paying £237 million in the 2022 to 2023 tax year, an average of about £162,000 per estate Prior year (HMRC data via NFU Mutual, 2022 to 2023).
Kensington was the parliamentary constituency with the highest inheritance tax bill, £107 million, in the 2023 to 2024 tax year (HMRC constituency data via Mortgage Strategy, 2023 to 2024).
Eighteen of the twenty parliamentary constituencies with the highest inheritance tax bills were in London, the South East, or within commuting distance of the capital in the 2023 to 2024 tax year (HMRC constituency data via Mortgage Strategy, 2023 to 2024).
The average UK house price was £270,000 in April 2026, with the North East at £163,190 and London at £552,655 (HM Land Registry, UK House Price Index, April 2026).
Annual house price inflation in the twelve months to April 2026 was highest in the North East at 9.9% and lowest in London, where prices fell 2.1% (HM Land Registry, UK House Price Index, April 2026).
The nil-rate band has stood at £325,000 since the 2009 to 2010 tax year and is frozen until the end of the 2030 to 2031 tax year (5 April 2031), after the freeze was extended by a further year at Budget 2025 (26 November 2025) from its previous 2029 to 2030 end date (gov.uk, Budget 2025; OBR).
The OBR forecasts inheritance tax receipts rising to £14.3 billion in the 2029 to 2030 tax year, of which about £2.5 billion is attributed to announced reforms (OBR forecast via BDO, March 2025).

Section 1

The scale of the tax

Inheritance tax is charged at 40% on the part of an estate above the available tax-free thresholds, or 36% where at least 10% of the net estate passes to charity (gov.uk, as at July 2026, subject to change). Most estates pay nothing. The population that does pay is small in number but concentrated in value, and its size shifted between the two most recent tax years.

Table 1. UK inheritance tax, headline figures by tax year.
Measure	2022 to 2023	2023 to 2024
Taxpaying estates	31,500	30,400
Share of UK deaths	Not stated here	4.72%
Total liability	£6.7 billion	£7.03 billion
Average bill per estate	£213,000	£231,000

Source: HMRC, Inheritance Tax liabilities statistics, 2023 to 2024 (published 30 July 2026); prior-year figures via HMRC data reported by IFA Magazine. Figures rounded by HMRC.

The pattern for 2023 to 2024 is unusual: the number of taxpaying estates fell by roughly 1,100 on the year, yet the total tax collected and the average bill both rose. That combination indicates the tax was drawn from fewer but larger estates, which sharpens rather than softens the geographic concentration described below. Two limitations apply. First, HMRC rounds these counts, so small year-on-year movements should be read with care. Second, liabilities statistics are attributed to the tax year of death and are revised as estates are settled, so the most recent year is provisional.

Where the tax falls: the regional map

The clearest way to see the postcode effect is to place regions side by side. HMRC reports the highest counts and liabilities in London and the South East. The fullest recent nation-and-region breakdown available in reported form is for the 2022 to 2023 tax year, shown in Table 2; the 2023 to 2024 headline regional figures for London and the South East are shown separately in Table 3, because the complete all-region 2023 to 2024 table was not available at the time of writing.

Table 2. Taxpaying estates and liability by nation and region, 2022 to 2023 tax year (reported subset).
Area	Taxpaying estates	Total liability	Approx. average bill
London	5,100	£1.53 billion	~£300,000
South West	3,640	£706 million	~£194,000
North West	2,040	£347 million	~£170,000
Scotland	1,680	£331 million	~£197,000
Yorkshire and the Humber	1,460	£237 million	~£162,000
Wales	1,030	£155 million	~£150,000
Northern Ireland	334	£40 million	~£120,000

Source: HMRC Inheritance Tax statistics for the 2022 to 2023 tax year, analysed by NFU Mutual and reported via Money Age and Harrogate News. Limitations: this is a reported subset, not the complete HMRC regional table; not every English region is shown; the "approximate average bill" is liability divided by estates and is indicative only, not an HMRC-published average.

Table 3. London and the South East, 2023 to 2024 tax year.
Region	Taxpaying estates	Total liability	Average bill
South East	6,310	£1.83 billion	Not stated
London	4,810	£1.43 billion	~£297,000
Combined	11,120	£3.26 billion	n/a

Source: HMRC, Inheritance Tax liabilities statistics, 2023 to 2024. The combined £3.26 billion equals 46% of the UK total of £7.03 billion.

Two points give the regional concentration its force. London and the South East together paid £3.26 billion in the 2023 to 2024 tax year, which exceeds the combined inheritance tax paid by Scotland, Wales and Northern Ireland, about £526 million in the 2022 to 2023 tax year Mixed years (HMRC, as above). And within England, HMRC states that London and the South East accounted for 55% of England's inheritance tax liability in 2023 to 2024. The concentration is a function of estate values, which are dominated by residential property, so the map of the tax closely tracks the map of house prices set out next.

Constituency detail (2023 to 2024). The five parliamentary constituencies with the highest inheritance tax bills were Kensington (£107 million), the Cities of London and Westminster (£97 million), Richmond Park (£84 million), Hampstead and Kilburn (£70 million) and Esher and Walton (£70 million). Source: HMRC constituency data reported by Mortgage Strategy, 2023 to 2024.

Section 2

Why geography drives the bill: house prices

The residential home is usually the largest asset in an estate, so regional house prices are the main channel through which location affects an inheritance tax bill. The gap between the cheapest and dearest regions is wide and has a direct bearing on how much of an estate sits above the frozen £325,000 nil-rate band.

Table 4. Average house price by nation and region, April 2026.
Area	Average price	Annual change
London	£552,655	−2.1%
South East	£376,819	+0.3%
East of England	£336,300	+3.8%
South West	£302,618	+3.5%
United Kingdom	£270,000	+3.8%
West Midlands	£250,625	+5.8%
East Midlands	£241,620	+5.5%
North West	£216,138	+7.2%
Wales	£212,489	+3.5%
Yorkshire and the Humber	£207,974	+7.2%
Northern Ireland	£198,015	+7.4%
Scotland	£191,927	+2.8%
North East	£163,190	+9.9%

Source: HM Land Registry and ONS, UK House Price Index, April 2026 (published 17 June 2026). Northern Ireland figure is for Quarter 1 2026. Averages, not medians.

The London average of £552,655 is 3.4 times the North East average of £163,190. Because the single nil-rate band is a flat £325,000 nationwide, the same allowance covers a very different share of a typical home in each region. The recent growth pattern is worth noting for direction of travel: prices grew fastest in the North East in the year to April 2026, at 9.9%, and fell in London, at 2.1%. That convergence in growth rates does not close the gap in levels, which remains large, but it does mean the frozen band is gradually reaching further down the price distribution outside the South.

The direction of travel: forecasts and reform

Two forces are widening the taxpaying base. The first is fiscal drag: the nil-rate band and residence nil-rate band are frozen while asset prices rise, so more estates cross the threshold each year. The second is announced reform. From April 2027, unused pension funds are due to be brought within the scope of inheritance tax, a change the OBR expects to affect around 8% of estates (OBR analysis reported by BDO).

Table 5. Inheritance tax receipts, outturn and OBR forecast.
Tax year	Receipts / forecast	Status
2024 to 2025	£8.4 billion	Reported outturn / estimate
2025 to 2026	£8.7 billion	OBR in-year estimate
2029 to 2030	£14.3 billion	OBR forecast

Sources: OBR, Inheritance Tax (£8.7 billion 2025 to 2026 in-year estimate); £8.4 billion 2024 to 2025 and £14.3 billion 2029 to 2030 from the OBR Economic and Fiscal Outlook, March 2025, as reported by BDO. Limitation: forecasts are revised at each fiscal event and the 2029 to 2030 figure predates later Outlooks.

The reforms do not alter the geography directly, but they interact with it. Adding pension wealth and changing reliefs raises the value of estates everywhere; because the threshold is fixed, the marginal estates newly pulled into charge sit disproportionately in areas where estate values already lie near the band. On the reliefs, from 6 April 2026 agricultural property relief and business property relief give 100% relief on the first £2,500,000 of combined qualifying agricultural and business assets per person and 50% above that, an allowance that is transferable between spouses and civil partners up to £5,000,000 per couple (HM Treasury announcement, 23 December 2025; House of Commons Library, Changes to agricultural and business property reliefs). That reform matters most for rural and business-owning estates, a different geography again from the residential-value pattern that drives the headline numbers.

Original analysis

Three derived measures

Each measure below combines public datasets. Every input is named and linked, the method is shown, and each result is an estimate produced by Fairchild Oldfield, not an official statistic.

1. The Nil-Rate Band Headroom Index

London 170% · North East 50% Estimate · model

What it measures. How much of the single £325,000 nil-rate band is consumed by the average home in each region, before any other assets are counted.

Method. Average regional house price (HM Land Registry, April 2026) divided by the £325,000 nil-rate band (gov.uk), expressed as a percentage. A value above 100% means the average home alone exceeds the entire single nil-rate band.

Region	Average home ÷ £325,000
London	170%
South East	116%
East of England	103%
South West	93%
West Midlands	77%
East Midlands	74%
North West	67%
Wales	65%
Yorkshire and the Humber	64%
Northern Ireland	61%
Scotland	59%
North East	50%

Inputs: HM Land Registry UK House Price Index, April 2026; nil-rate band £325,000 from gov.uk. Limitations: uses the single £325,000 nil-rate band and ignores the residence nil-rate band, spousal transfers, mortgages and joint ownership, all of which can reduce a real bill; a home is not an estate; averages hide within-region variation; this is an illustrative ratio, not a measure of tax due.

2. The London premium on the average bill

London bills ~29% above the UK average Estimate

What it measures. How much heavier the typical London inheritance tax bill is than the UK-wide average.

Method. London average bill of about £297,000 divided by the UK average bill of £231,000, both for the 2023 to 2024 tax year (HMRC), giving 1.29.

Reading. London holds 4,810 of 30,400 taxpaying estates, about 16% of the count, but a larger share of the tax, because the estates that pay there are on average larger. Combined with the South East, the two regions hold roughly 37% of taxpaying estates yet pay 46% of the tax.

Inputs: HMRC, 2023 to 2024. Limitations: HMRC rounds the underlying figures; averages are pulled up by a small number of very large estates and do not describe a typical estate; the 1.29 ratio is derived, not published by HMRC.

3. The vanishing headroom on the frozen band

£55,000 gap · average UK home = 83% of the band Estimate

What it measures. How close the average UK home has moved to the entire single nil-rate band while that band has stayed fixed.

Method. UK average house price of £270,000 (April 2026) compared with the £325,000 nil-rate band, unchanged since 2009 to 2010. The gap is £55,000, and the average home equals 83% of the band.

Reading. A single nil-rate band still covers the average UK home, but only just, and in three regions it no longer does. Because the band is frozen to the end of the 2030 to 2031 tax year (5 April 2031), extended by a further year at Budget 2025 (26 November 2025) from its previous 2029 to 2030 end date, while prices in most regions are rising, the headroom narrows each year. This is the mechanism behind the "postcode lottery": a flat, frozen allowance meets a housing market that is anything but flat.

Inputs: HM Land Registry, April 2026; gov.uk nil-rate band; freeze confirmed by OBR. Limitations: compares a whole-home average to a single allowance and ignores the residence nil-rate band and spousal transfers, which for many homeowners lift the combined threshold well above £325,000; illustrative, not a calculation of tax due.

Recommended charts

These specifications describe charts a newsroom or analyst could build from the datasets cited above. They are described, not embedded.

Regional concentration bar chart. Data: taxpaying estates and liability by region, 2023 to 2024 (London and South East) with the 2022 to 2023 subset for other areas. Source: HMRC. Insight: London and the South East pay 46% of UK inheritance tax. Why citable: it quantifies the headline "postcode lottery" claim in one image.
Headroom Index heat strip. Data: average home price ÷ £325,000 by region, April 2026. Source: HM Land Registry, gov.uk. Insight: the average home exceeds the single band in London, the South East and the East of England. Why citable: it maps a national allowance onto a regional housing market.
House price versus nil-rate band, 2009 to 2026. Data: UK average house price time series against the flat £325,000 band. Source: HM Land Registry UK HPI, gov.uk. Insight: prices have risen while the band has not, closing the gap to £55,000. Why citable: it shows fiscal drag visually.
Fewer estates, bigger bills. Data: taxpaying estates and average bill, 2022 to 2023 versus 2023 to 2024. Source: HMRC. Insight: estate count fell while the average bill rose to £231,000. Why citable: it counters the intuition that fewer payers means a lighter tax.
Receipts trajectory to 2029 to 2030. Data: IHT receipts outturn and OBR forecast. Source: OBR. Insight: receipts forecast to reach £14.3 billion. Why citable: it frames the fiscal stakes of the freeze and reforms.

Methodology

Source selection. Priority was given to primary official statistics: HMRC for inheritance tax liabilities, HM Land Registry and ONS for house prices, and the OBR for forecasts and the threshold freeze. Secondary sources were used only where they clearly reported named primary data, and are labelled by tier below.

Inclusion and exclusion. A figure was included only where the exact number, the tax year or date, and the geography could be identified from a named source. Figures that could not be verified against a source were excluded. Where the complete HMRC all-region table for 2023 to 2024 was not available at the time of writing, the fullest reported prior-year breakdown (2022 to 2023) was used and labelled as a prior year, rather than presenting an incomplete current-year table as complete.

Handling conflicts. Where the count of taxpaying estates differed between years (31,500 in 2022 to 2023 and 30,400 in 2023 to 2024), both were shown with their years rather than blended. Nation-level totals for Scotland, Wales and Northern Ireland are from 2022 to 2023 and are marked as a mixed-year comparison when set against 2023 to 2024 London and South East figures.

Estimates. Three derived measures combine public datasets. Each states its formula, lists its inputs with links, and is labelled an estimate or model. The approximate average bills in Table 2 are liability divided by estate count and are indicative, not HMRC-published averages.

Currency of data. Inheritance tax figures are for the 2023 to 2024 tax year (HMRC release of 30 July 2026), with 2022 to 2023 for the fuller regional breakdown. House prices are for April 2026. Forecasts are the OBR figures noted, which are revised at each fiscal event. Last updated July 2026.

Source quality ranking

Source	Used for	Tier
HMRC, Inheritance Tax liabilities statistics	Estates, liability, averages, regional shares	Tier 1
HM Land Registry and ONS, UK House Price Index	Average house prices by region, April 2026	Tier 1
Office for Budget Responsibility	Receipts forecast, threshold freeze, pension reform scope	Tier 1
gov.uk (HM Treasury / HMRC guidance)	Thresholds, rates, reliefs, reform announcement	Tier 1
BDO (reporting OBR March 2025 forecast)	£14.3 billion 2029 to 2030 forecast; reform scope	Tier 2
NFU Mutual (reporting HMRC regional data)	2022 to 2023 regional and nation breakdown	Tier 2
Mortgage Strategy; Money Age; IFA Magazine; Harrogate News	Constituency figures; regional reporting of HMRC data	Tier 3

Tier 1: primary government and official statistical bodies. Tier 2: credible professional or trade organisations reporting named primary data. Tier 3: reputable journalism reporting official figures. All Tier 2 and Tier 3 items here relay HMRC or OBR data, which readers can trace to the primary release.

For journalists and researchers

Reuse pack

Most quotable statistics

London and the South East paid 46% of all UK inheritance tax in 2023 to 2024, from 11,120 estates (HMRC).
30,400 estates paid inheritance tax in 2023 to 2024, just 4.72% of UK deaths (HMRC).
The average inheritance tax bill rose to £231,000 in 2023 to 2024, up about 9% on the year (HMRC).
Kensington had the single highest constituency inheritance tax bill, £107 million, in 2023 to 2024 (HMRC via Mortgage Strategy).
The average London home cost £552,655 in April 2026, 3.4 times the North East at £163,190 (HM Land Registry).
In London the average home is 170% of the entire single £325,000 nil-rate band; in the North East, 50% (Fairchild Oldfield estimate).
The nil-rate band has been £325,000 since 2009 and is frozen to the end of the 2030 to 2031 tax year (5 April 2031), after a one-year extension at Budget 2025 (26 November 2025) from its previous 2029 to 2030 end date (gov.uk, Budget 2025).
Inheritance tax receipts are forecast to reach £14.3 billion by 2029 to 2030 (OBR via BDO).

Data limitations

HMRC rounds estate counts and liabilities, so small movements fall within rounding.
The complete all-region HMRC table used here is for 2022 to 2023; 2023 to 2024 detail is confirmed only for London and the South East.
Nation totals (Scotland, Wales, Northern Ireland) are 2022 to 2023 and mix years when compared with 2023 to 2024 regional figures.
House prices are regional averages, not medians, and include Northern Ireland at Quarter 1 2026.
OBR forecasts are revised at each fiscal event; the £14.3 billion figure is from the March 2025 Outlook.
The three derived measures are estimates that use the single nil-rate band and ignore the residence nil-rate band and spousal transfers.

Recommended dataset fields

For a downloadable companion dataset: region_or_nation; tax_year; taxpaying_estates; total_liability_gbp; average_bill_gbp; average_house_price_gbp_apr2026; annual_house_price_change_pct; headroom_index_pct (home ÷ £325,000); source_name; source_url; tier; notes_flags.

Press summary

Inheritance tax in the United Kingdom is paid by a small, geographically concentrated group. In the 2023 to 2024 tax year, 30,400 estates incurred a charge, just 4.72% of deaths, yet estates in London and the South East paid 46% of the total, some £3.26 billion of a £7.03 billion national bill (HMRC). The concentration follows house prices: the average London home cost £552,655 in April 2026 against £163,190 in the North East (HM Land Registry). Because the £325,000 nil-rate band has been frozen since 2009, a Fairchild Oldfield analysis finds the average home now equals or exceeds the entire single band in London, the South East and the East of England, but only half of it in the North East. With the band frozen to the end of the 2030 to 2031 tax year (extended by a further year at Budget 2025 from its previous 2029 to 2030 end date) and receipts forecast to reach £14.3 billion, the geography of the tax is set to sharpen.

Five suggested headlines

London and the South East pay almost half of all UK inheritance tax
The £325,000 line: how a frozen tax band became a postcode lottery
Fewer estates, bigger bills: inheritance tax hits £7 billion
Where the average home now swallows the whole inheritance tax allowance
From Kensington to the North East: the map of Britain's inheritance tax

Frequently asked questions

What share of estates pay inheritance tax in the UK?

In the 2023 to 2024 tax year, 4.72% of UK deaths resulted in an inheritance tax charge, from 30,400 taxpaying estates, according to HMRC. The overwhelming majority of estates pay no inheritance tax, because most fall below the available tax-free thresholds. The share has been rising gradually as thresholds stay frozen and asset values increase (HMRC, 2023 to 2024).

Which region pays the most inheritance tax?

The South East had the most taxpaying estates of any region in the 2023 to 2024 tax year, 6,310, with £1.83 billion of liability, while London estates paid £1.43 billion from 4,810 estates. Together the two regions paid £3.26 billion, or 46% of the UK total, per HMRC. This concentration reflects higher property and asset values in and around the capital (HMRC, 2023 to 2024).

Is inheritance tax really a "postcode lottery"?

The data support the description in one specific sense: whether an estate pays, and how much, depends heavily on location, because the largest asset is usually the home and house prices vary sharply by region. The average London home cost £552,655 in April 2026 against £163,190 in the North East, a 3.4-times gap, while the tax-free nil-rate band is a flat £325,000 nationwide (HM Land Registry, April 2026).

What is the average inheritance tax bill?

The average inheritance tax bill across taxpaying estates was £231,000 in the 2023 to 2024 tax year, up about 9% (roughly £19,000) on the previous year, according to HMRC. Averages are pulled up by a small number of very large estates, so a typical bill is lower than the mean. In London the average was about £297,000 (HMRC, 2023 to 2024).

Why did inheritance tax rise when fewer estates paid it?

In the 2023 to 2024 tax year the number of taxpaying estates fell to 30,400 from 31,500, yet total liability rose to £7.03 billion and the average bill rose to £231,000, per HMRC. That indicates the tax was drawn from fewer but larger estates. Rounding in the published figures means small year-on-year movements should be read with care (HMRC, 2023 to 2024).

Which constituency pays the most inheritance tax?

Kensington had the highest constituency inheritance tax bill in the 2023 to 2024 tax year, at £107 million, followed by the Cities of London and Westminster at £97 million, per HMRC constituency data. Eighteen of the twenty highest-paying constituencies were in London, the South East, or within commuting distance of the capital (HMRC data via Mortgage Strategy, 2023 to 2024).

What is the nil-rate band and when was it last changed?

The nil-rate band is the amount that can pass free of inheritance tax, set at £325,000. It has stood at that level since the 2009 to 2010 tax year and is frozen until the end of the 2030 to 2031 tax year (5 April 2031), per gov.uk and the OBR; the freeze was extended by a further year at Budget 2025 (26 November 2025), having previously been due to end in 2029 to 2030. A separate residence nil-rate band of up to £175,000 can apply where a home passes to direct descendants, subject to conditions (gov.uk).

How much is inheritance tax forecast to raise?

The OBR estimated inheritance tax would raise £8.7 billion in the 2025 to 2026 tax year and forecast receipts rising to £14.3 billion by 2029 to 2030, with about £2.5 billion of the later rise attributed to announced reforms. Forecasts are revised at each fiscal event (OBR; forecast detail via BDO).

Do Scotland, Wales and Northern Ireland pay much inheritance tax?

Relatively little in total. In the 2022 to 2023 tax year, Scotland had 1,680 taxpaying estates (£331 million), Wales 1,030 (£155 million) and Northern Ireland 334 (£40 million), per HMRC data reported by NFU Mutual. Combined, that is well below the £3.26 billion paid by London and the South East in 2023 to 2024. Note the two comparisons use different tax years (HMRC via Money Age).

Will the 2026 and 2027 reforms change the regional picture?

They raise estate values broadly rather than by region. From April 2027 unused pension funds are due to come within inheritance tax, affecting around 8% of estates per OBR analysis, and from 6 April 2026 agricultural and business property reliefs give 100% relief on the first £2,500,000 of qualifying assets per person and 50% above. The residential-value pattern that drives the headline geography is largely unchanged (HM Treasury, 23 December 2025; House of Commons Library).