Trafford is the only northern local authority emerging as a significant inheritance tax hotspot as rising property values continue to push more estates above tax thresholds, latest research from The Private Office reveals.

The analysis found that 136 UK local authorities are already exposed to inheritance tax liabilities in 2026, with average bills ranging from around £150 to more than £340,000 per estate.

However, the data points to a sharp north-south divide, with the vast majority of high-liability areas concentrated across London and the South East.

Trafford was the only northern authority included in the higher-exposure dataset, with an estimated average inheritance tax liability of approximately £20,814 per estate.

HIGH EXPOSURE AREAS

Kensington and Chelsea recorded the highest projected liability nationally at £343,924, driven by average property values of £1.18m.

Other high-exposure areas included Camden, Richmond upon Thames, Hammersmith and Fulham, Elmbridge, St Albans and Windsor and Maidenhead.

The research highlights how sustained house price growth is increasingly pulling more homeowners into inheritance tax territory, particularly across southern England where property wealth continues to dominate estate values.

The current inheritance tax nil-rate band remains frozen at £325,000 until at least 2030/31, while the residence nil-rate band can raise the effective threshold to £500,000 when passing a family home to direct descendants.

PENSION CHANGES

The report also warned that planned pension tax changes due from April 2027 could dramatically widen inheritance tax exposure across the country.

Under the proposed reforms, unused pension funds and death benefits will be included within inheritance tax calculations for most estates for the first time.

The Private Office estimates that once pension wealth is incorporated, a further 152 local authorities could move into inheritance tax exposure, taking the total number affected to 288 areas nationwide.

Inheritance tax receipts have already climbed to £8.25bn during 2024/25 and are forecast to exceed £9bn by 2026/27.

PROPERTY TAX

Pippa Vick (main picture, inset), financial adviser at The Private Office, said: “Inheritance tax is increasingly becoming a property tax by default.

“Many families don’t consider themselves wealthy, yet long-term house price growth means their estates can face substantial tax bills. Without proper planning, beneficiaries may be forced to sell assets simply to settle the liability.”

She added that including pensions within inheritance tax calculations would have “a major regional impact”, even in areas that have historically seen limited exposure to inheritance tax liabilities.