Taxpayers pay an average of 23.9% (£536,688) in inheritance tax (IHT) when an estate worth £2.2m is inherited. Only a small number of people actually pay IHT, with only 4.2% of all UK deaths were subject to the death duties in 2017-18.
In comparison, individuals in the EU pay an average of 10.3% (£232,158) on an estate of the same size, according to analysis by UHY Hacker Young.
In the bigger picture the UK has the fourth highest IHT rate out of 28 countries, first is Japan with a rate of 29.5%; Belgium is in second place at 27.08% on estates under £604,549, and France are just above the UK paying £568,931 at 25.3%.
As well as the overall rate being high, some experts have argued that the UK’s IHT regime is too complex. A number of different allowances must be taken into account when calculating what is owed in IHT, which can easily result in people missing out on reliefs and exemptions.
The Office for Tax Simplification has proposed reducing the number of free gift allowances to just one simpler allowance as a result.
IHT is seen by many as an unfair death tax. This has led to calls for it to be abolished, as high IHT rates can mean individuals face large tax bills when they are dealing with bereavement.
The US, China and Australia have no estate duties meaning they pay no IHT. There are also countries in the EU that do not charge IHT, such as Croatia, Poland and Portugal.
HMRC collected a record £5.4bn of IHT receipts in 2018-19, this increased from £5.2bn in the previous year.