Almost 3,400 estates in the capital were exposed to the tax, payable after death. The average value of properties held within those estates was £809,406.
A Freedom of Information request filed by Just Group to HMRC revealed that the average value of estates in the capital liable for IHT was more than £1.9m.
In the South East, where 4,880 estates were subject to IHT, property, worth on average £657,841, accounted for 40% of assets in an IHT-paying estate.
The total average value of estates was £1.6m.
In the North East, the region which on average has the lowest valued estates worth £1.2m, property wealth accounted for 26% of the total value of the estate.
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Stephen Lowe, group communications director at Just Group, said: “When it comes to estates that pay inheritance tax the figures speak for themselves. Average house prices in the UK have more than trebled since 2002, with those living in London and the South East particularly impacted due to average property prices being far higher than the rest of the country.
“The introduction of the residence nil-rate band in 2015 reduced the IHT due for some of those leaving property to a direct descendant. But the threshold has been held at £175,000 since 2021 while house prices have risen a further 15%, so it’s likely more people are being dragged into paying that tax through the value of their property.
“Estate planning is a complex area that can benefit from professional financial advice, helping to support individuals wanting to manage their estate in an efficient way that ensures as much of their estate can be passed on as inheritance to loved ones.”
