Is your city on the list of UK cities with the highest increases in IHT bills?

A recent analysis projects that rule changes, rising property prices, and frozen thresholds will result in more than 37,000 estates being subject to inheritance tax by 2027

Inheritance tax bills are becoming more and more common, frequently amounting to tens of thousands of pounds, with some regions of the nation being more affected than others.

According to a recent study, the UK's inheritance tax hotspotswhere both the number of estates subject to the tax and the amount owedare expected to grow.

Inner London is notable for having some of the highest inheritance tax rates because of its high property values and significant concentration of wealth. However, there have also been notable increases in the number of impacted estates and IHT bills in other cities, including Wolverhampton, Manchester, Bradford, Leeds, Sheffield, and Edinburgh.

Based on data from an HMRC Freedom of Information request, the law firm Irwin Mitchell's report estimates that by 2027, there will be over 37,000 estates in the UK subject to IHT, with a total bill of nearly 9 billion.

The projections are based on government data that was not previously available and includes 177,000 IHT estates in all 121 UK postcodes.

The projections have been modified to reflect the adjustments made in the previous year's chancellor Rachel Reeves' budget, which included extending the threshold freeze until 2030 and altering the business property relief (BPR) and agricultural property relief (APR) starting in April 2026.

Many families in the UK are very concerned about the rise in inheritance tax obligations, according to Andrea Jones, national head of Irwin Mitchell's private client advisory team.

"In order to successfully navigate these changes and make future plans, people urgently need to seek professional advice," our findings show.

Jones stated: "With the previously mentioned extension of the threshold freeze and the BPR and APR changes, it's more crucial than ever to comprehend the ramifications and take proactive measures to lessen the impact on estates.

We look at ways to lower your IHT bill in a different article.

Which cities are expected to see the largest increases in their IHT bills?

By 2027, it is anticipated that Bradford will have the largest increase in the number of estates subject to IHT, rising by 150% to 173. It is anticipated that Bradford families will owe 30 million, a 233% increase.

By 2027, Wolverhampton's IHT bills are predicted to experience the largest increase, rising by 375 percent to 38 million. This will likely be gathered from 143 estates, which is more than twice as many as were impacted in 2015.

The total number of estates in Inner London that are anticipated to receive IHT bills in the next two years is 4,813, an increase of 80% since 2015. Families in inner London are expected to pay 1 point 6 billion in IHT by 2027, nearly twice as much as they did ten years prior.

Double-digit increases are being observed in the proportion of estates subject to inheritance tax in Leeds, Manchester, and Birmingham.

The study came to the following conclusion: "The anticipated rise in IHT revenue and liabilities emphasizes the significance of proactive estate planning.

"People can lessen the effects of these changes and improve estate management by taking into account tactics like gifting, trusts, and examining pension and investment plans.

In another article, we debunk six myths surrounding inheritance taxes.