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Grieving families in a single London borough pay more inheritance tax (IHT) than Wales and Northern Ireland respectively, analysis has revealed. Londoners paid the most IHT in the 2019/20 tax year, at £1.3bn, with the average tax bill just over £300,000. In the borough of Barnet alone, residents paid £104m. Just £97m was levied on inhabitants of Wales and £42m was paid by people living in Northern Ireland.

Huge variations in property wealth across Britain mean the death duty has sparked a stark geographical divide. Overall, the Southeast handed the taxman more than £1bn in death duties, as rising house prices over the past decade have dragged a rising number of ordinary families into paying the tax. A typical home in Wales costs just £173,000, meaning the principality had among the lowest inheritance tax takes.

The Telegraph is campaigning to scrap the 40pc death tax, with more than 50 MPs backing the cause so far. Those living in the south are disproportionately hit by the tax. People in Surrey, where the average home costs more than £445,000, paid £251m in IHT. Meanwhile, those living in Oxfordshire paid £109m, according to the most recent HMRC data available – more than twice the amount paid by the whole of Edinburgh.

London and the Southeast had the highest number of families paying an inheritance tax bill, at 4,190 and 4,990 respectively. Together, they accounted for around half of inheritance tax charges across the whole country. The minimum inheritance tax allowance has been stuck at £325,000 since 2009, and will remain frozen until 2028. There is an extra £175,000 tax-free allowance if a main residence is passed down to children or grandchildren, but anything over this level is taxed at a rate of 40pc. Spouses can share their allowances.  

Helen Thornley, of the Association of Taxation Technicians, said this extra allowance for passing on homes made it even harder for regular families to plan around the tax. She said: “It does not seem logical that the way you are taxed depends on where you hold your wealth. A person with a £200,000 home and £600,000 in investments will pay more inheritance tax than someone with a £600,000 home and £200,000 in investments.

“This makes the tax very difficult to administer. Plus you have various replacement property provisions, so if you own a house and sell it, sometimes that cash counts towards your estate. “The whole thing is so complicated that often you will need a lawyer or an accountant to advise on it, and that means paying expensive fees.”

While property prices in Wales are low, they are climbing faster than the national average, suggesting more homeowners in the country may eventually be dragged into the tax bracket. Property prices in Wales rose 4.8pc in March, compared with an average 4.1pc rise across Britain.

A spokesman for the Treasury said: “More than 93pc of estates aren’t expected to pay any inheritance tax in the coming years – however the tax still raises more than £7bn a year to help fund public services like the NHS and schools. “Estates of surviving spouses and civil partners can pass on up to £1m without an inheritance tax liability - significantly more than the average UK home of £285,000.”