HARROGATE has been declared as Yorkshire’s inheritance tax hotspots as rising house prices push up the number of households paying the tex.
Insurer NFU Mutual examined the latest HMRC data, which showed more than £3.4bn was paid across the country in inheritance tax in 2013-14 - up 8.6 per cent on the previous year.
The top ‘inheritance tax hotspots’ in the country were Harrow West and Richmond Park, and NFU Mutual said the figures showed a clear “north-south divide”, with the number of people paying in Harrow and the surrounding area being roughly the same as those paying the tax in the whole of the North East of England.
Harrogate and Knaresborough were declared Yorkshire’s inheritance tax ‘hotspot’, followed by Skipton and Ripon, York Outer and Sheffield Hallam.
Edward Taylor, a solicitor at Harrogate-based Berwins, said he was not surprised by the findings.
He said: “We are very lucky in Harrogate and Knaresborough as it’s quite a prosperous part of the word. The downside is that house prices are high and inheritance tax becomes a significant issue.
“People who have worked hard all of their life don’t want the tax man to take their entire estate on their death.”
Mr Taylor said that while other areas in Yorkshire may have suffered in the housing market crash, prices in Harrogate had increased, exasperating the problem. Harrogate has the highest average house price in the region at around £264,000.
Research carried out by NFU Mutual also suggests that most people are unprepared for dealing with inheritance tax – with just one in four consumers knowing the basics - that the threshold is £325,000 and tax rate on anything over this 40 per cent.
Stephen Berry, personal finance specialist at NFU Mutual, said there were “simple steps” people could take to ensure their loved ones don’t pay any more tax than they have to, but planning was key.
He said: “Over the past two decades inheritance tax has gone from being an issue for the super-wealthy to something that affects millions of people – driven largely by the rise in house process.”