Introduction
This research looks at the taxes and charges involved when someone passes away. In 2019-20, the government is projected to receive £5.35 billion from grieving taxpayers via inheritance tax, the highest amount ever. But this is only one of the many ways that the government extracts money from the dead. These charges also include the cost of death certificates, land registry fees, probate and VAT.
This paper also addresses the proposed changes to probate fees and how this will significantly increase costs to the taxpayer.
Key findings
- For a homeowner living in London, without a spouse or children to pass assets on to, who purchases a coffin and is cremated, the cost of death could be up to £60,773. This could rise to £61,308 if the newly proposed probate fees come into force.
- The cost of death varies extensively throughout the UK. The average cost of death for homeowners in England is £405, since most estates do not pay inheritance tax. This is the total cost of probate fees, land registration tax and death certificate costs., These are the average taxes and fees paid, and do not include other costs such as funerals or moving house.
- Of the total amount of £4.65 billion in inheritance tax paid in 2015-16, £1.04 billion was from London estates. This means 22.37 per cent of the total amount liable came solely from the capital. The average liability for each of the 24,500 estates was £189,796, which includes all types of assets.
- Of the 24,500 estates liable for inheritance tax in 2015-16, the most current records available, 4,660 were located in London. This means 19.02 per cent of total estates liable for inheritance tax were located in London.
- The Bona Vacantia Division of the Government Legal Department acts for the Crown to administer the estates of people who die without a will (intestate). For the 2018-19 year, the division dealt with 55,000 cases and had a net income of £62 million, an increase of £9 million from the previous year.