THE average inheritance tax (IHT) bill in Northern Ireland has climbed by 4.3 per cent to £158,730, according to latest figures from HMRC.
But just 252 families in the region paid for deaths in 2018/19 (the latest year for which figures have been finalised).
They forked out a total of £40 million of inheritance tax, which is a tax on the estate (property, money and possessions) of someone who has died.
There’s normally no inheritance tax to pay if the value of that estate is below the £325,000 threshold.
In fact, only 3.7 per cent of all deaths across the UK resulted in an inheritance tax bill in 2018/19, bringing in more than £5 billion for the Exchequer.
But that percentage is expected to rise following the Chancellor’s decision in March to freeze the tax-free allowances for the next five years to help pay the country's mounting coronavirus bill.
The latest figures show those families that do pay the tax can end up forking out very large sums of money.
Only Wales at £155,963 had a lower IHT average bill than in Northern Ireland.
The highest bill was in London, where 4,930 people paid a total of £1.06 billion - an average of £215,010.
Sean McCann, a chartered financial planner at NFU Mutual, said: “Inheritance tax is feared by many but paid by relatively few.
“But with the average UK bill now in excess of £209,000, it can make a significant dent in a family’s wealth for those who do get caught in the net.
“With the tax-free allowances frozen for the next five years, rising asset prices and a heated housing market, a growing number of families will be impacted.
“It’s critical that families concerned about being caught by inheritance tax seek advice as early as possible. The earlier you plan the more options you have to mitigate any potential bill.”
He said that people can look at a number of ways to reduce their inheritance tax bill, including not touching their pension until they have to, using various business reliefs, taking out life insurance, or making gifts to family members.
