Affluent Altrincham In The North West Moves Into The Top 10

London’s elite neighbourhoods dominate the top 10 list for the highest average Inheritance Tax (IHT) paid per estate, according to analysis of the latest government data by Irwin Mitchell Private Client Advisory.

According to the latest statistics, which cover 2022/23, Kensington leads the way, with each estate paying an average of £1,375,000 in IHT. Chelsea & Fulham, and Cities of London & Westminster, also feature prominently, each with average IHT bills over £1m.

Notably, Altrincham & Sale West in Greater Manchester, and Torridge and West Devon, are the only areas outside London to make the top 10, with an average IHT bill of £451,220 and %534,247 per estate respectively. 

The full top 10 locations for average IHT paid per estate in 2022/23 are:

Kensington – £1,375,000

Chelsea and Fulham – £1,114,583

Cities of London and Westminster – £1,075,949

Hampstead and Kilburn – £717,949

Westminster North – £647,059

Finchley and Golders Green – £562,842

Wimbledon – £556,452

Torridge and West Devon – £534,247

Islington South and Finsbury – £468,085

Altrincham and Sale West – £451,220

Expert Opinion

“Our analysis underscores the importance of proactive estate planning, particularly in areas with high-value estates. As property values and asset portfolios continue to rise, so too does the complexity of managing inheritance tax exposure. Seeking professional advice is essential to ensure families can protect their legacies and plan effectively for the future.” Andrea Jones, National Head of Irwin Mitchell’s Private Client Advisory team

This analysis follows Irwin Mitchell’s latest thought leadership publication, the Inheritance Tax Revolution Report, which explores the evolving IHT landscape across the UK. The report draws on seven years of data across 121 postcode areas and forecasts that the number of estates liable for IHT will rise from 4% to 7% by 2028, with Greater London’s total IHT bill expected to grow by 54% to £2.6 billion annually.

In the Autumn Budget of November 2024, Chancellor Rachel Reeves announced sweeping reforms to Inheritance Tax (IHT), including significant changes to Business Property Relief (BPR), Agricultural Property Relief (APR), and the treatment of pension assets.

From 6 April 2026, BPR and APR will be capped at £1 million of qualifying assets, with any excess only eligible for 50% relief. This marks a major shift for estates with substantial business or agricultural holdings, which previously benefited from 100% relief.

Additionally, from 6 April 2027, unused pension funds and death benefits will be brought into scope for IHT. Following these announcements, the government published draft legislation on 21 July 2025 outlining how the pension-related changes will be implemented. Under the proposals, personal representatives (PRs) will be responsible for calculating and paying IHT on pension assets—even if they cannot access those funds directly.

Experts at Irwin Mitchell have expressed serious concerns about the practical implications of these reforms. The firm warns that the changes could turn estate administration into a legal and emotional minefield, especially when pension beneficiaries differ from estate beneficiaries. Executors may be forced to use estate assets—potentially including the family home—to pay tax bills, then seek reimbursement from pension recipients who are under no legal obligation to cooperate.