Sussex residents owe the government £239 million in inheritance tax

Experts have advised Sussex residents to regularly gift money to heirs after the discovery.

Researchers at East Sussex wills and probate solicitors, Heringtons Solicitors, explored recent government data which revealed the estimated number of estates still owing inheritance tax, and the estimated value of this tax.

Inheritance Tax is a tax on the estate of someone who has died. It includes all assets, from property, money in the bank, and stocks and shares, to smaller possessions.

"It is estimated that 4,990 estates may still owe inheritance tax in the South East, amounting to an estimated £1,080 million,” a spokesperson for the Heringtons researchers said.

"The data highlighted the areas where the estates and values owed were highest, showing the South East owed the most inheritance tax of all regions in the UK.

“These figures estimate that the average tax value unpaid per estate in the South East is around £216,400 compared to just £178,700 in Northern Ireland.”

Within the South East, it is revealed that West Surrey was the area owing the most inheritance tax overall, with East Sussex coming fifth on the list at £80 million owed from 380 estates.

The south west part of West Sussex came seventh (£85m from 355 estates), whilst the north east came 11th (£42m from 211 estates). Brighton and Hove finished in 12th (£32m from 176 estates).

Sally Kinsey, Partner at Heringtons, said: “Inheritance Tax mainly impacts those with ‘generational wealth’ as a means to distribute it more fairly. Based on the figures above, the problem is that the average household in the South East will owe around £71,360 in inheritance tax, based on the 40 per cent tax rate over the £325,000 threshold; money which many do not have spare.

“To ensure that families are able to claim their rightful inheritance, there are payment plans, loans and government programmes in place to help. That said, many of these options have premiums, including high interest rates, attached to them.

“This is why it’s crucial to consider inheritance tax in your inheritance plan, to ensure your beneficiaries are not left stranded. Seeking the advice of a specialist wills and probate solicitor ahead of time is something all individuals should prioritise, especially with funds over the £325,000 threshold.”

An estate will only be liable for inheritance tax if it is over the threshold of £325,000. A beneficiary will not have to pay if they are the spouse or civil partner of the deceased.

“As such, it is little surprise that southern areas, like the South East, appear to owe the government more than their northern counterparts,” the researchers said.

"After all, the median household wealth in these areas is significantly above the £325,000 threshold.

“In comparison, areas in Yorkshire and the Humber and the North West have a median household wealth of around half that of the South East, explaining this disparity.”

If you’re looking for help paying inheritance tax in the South East area, contact Heringtons at Heringtons.com.