The areas with the highest inheritance tax obligations

Estates in hundreds of regions are exceeding the inheritance tax thresholds due to high property prices

Inheritance tax obligations are increasing, and in some regions of the United Kingdom, the liability is expected to reach six figures.

A growing number of estates have fallen into the inheritance tax trap due to frozen thresholds, high house price growth, and rising asset values, even in spite of a 325,000 threshold and a 175,000 main residence allowance.

Homes in 136 local authorities are already subject to inheritance tax in 2026, according to research by The Private Office, with estimated average liabilities ranging from slightly over 150 to more than 340,000 per estate.

Current BFIA issues. Even with the nil-rate band and primary residence allowance, the wealth manager calculated inheritance tax obligations by analyzing average property prices by local authority.

According to the Private Offices analysis, Kensington and Chelsea is the most costly inheritance tax hotspot in the UK, with the South East and London having the highest liability.

When unused pension savings are taken into account when calculating inheritance taxes, more regions may be affected starting in 2027.

These are the areas where inheritance taxes are most expensive.

The disparity in inheritance taxes across regions.

According to the data, there may be a regional disparity in the UK's exposure to inheritance taxes in 2026, with a significant concentration of liabilities in the South East and London.

An estate could easily exceed the current frozen thresholds due to the increased cost of housing in these areas.

With an average property value of £1.18 million, Kensington and Chelsea is at the top of the list.

The research indicates that the average estate values exceed 1.3 million and the estimated IHT liability is 343,924 per estate.

The estimated tax bills for other London boroughs, such as Camden, Richmond upon Thames, Hammersmith, and Fulham, are also well into the six figures. Beyond the capital, wealthy southern communities like Elmbridge, St Albans, Windsor, and Maidenhead are still subject to taxes, which is indicative of consistent increases in home prices throughout the commuter belt.

Northern England, on the other hand, has very little exposure at higher levels, with only a few regions getting close to the tax threshold.

The only northern authority in the dataset is Trafford, which has an estimated average inheritance tax liability of about 20,814.

"Inheritance tax is increasingly becoming a property tax by default," stated Pippa Vick, a financial adviser at The Private Office.

Many families don't think of themselves as wealthy, but their estates may have to pay large taxes due to long-term increases in home prices, especially in London and the South East. Beneficiaries might have to sell assets just to pay off the debt if they don't plan ahead. Structured estate planning and early counseling can greatly lower the final tax burden.

"Including pensions has a significant regional impact because they have long been excluded from inheritance tax calculations. The impact is significant in high-value neighborhoods, but even in more reasonably priced areas, families who had previously anticipated paying no inheritance tax may now have to pay a bill. It's important to plan ahead. A "