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‘My Windrush Generation mother came to Britain with nothing – but even she was hit by inheritance tax’

Amanda whose family face a significant inheritance tax bill - Paul Cooper
Amanda whose family face a significant inheritance tax bill - Paul Cooper

In 1965, Amanda’s mother arrived in Britain from St Vincent & the Grenadines at the age of 30 “with absolutely nothing”.

After five years spent working as a nurse and looking after her three children, she bought her first and only home – a Victorian mid-terraced house in Hackney – for £4,200, taking out a £3,600 mortgage and borrowing the deposit from a solicitor.

She lived in the borough for the rest of her life, even while its once-diverse population became increasingly middle-class as desirable Victorian properties were bought, renovated and sold, driving out locals who could not afford the premium.

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Amanda’s mother passed away from vascular dementia in April last year, leaving the family home to her children in her will. But the London property boom means that her children were left facing a six-figure inheritance tax bill.

The Telegraph is campaigning to scrap the divisive 40pc death duty which was designed to tax the super-wealthy, but is increasingly ensnaring more and more ordinary families. More than 50 MPs including Liz Truss and Nadhim Zahawi have now called on Prime Minister Rishi Sunak to abolish it.

There are fears that many of the Windrush Generation who bought London properties after arriving in Britain are now in danger of passing on six-figure tax bills to their children when they die.

Most black, black British, black Welsh, Caribbean, or African people in Britain live in London, Office for National Statistics figures show. Of the 10 local authorities with the highest population of Black Caribbean Britons, nine are in the capital.

Meanwhile, house prices in London have soared from £59,500 in the 1970s to £532,200 on average – an increase of 795pc.

When she bought it, Amanda’s mother’s home was slightly less expensive than the London-wide average of £4,600, according to Land Registry data.

But rapidly rising property prices mean homes in Hackney are now worth £628,000 on average, ONS figures show.

“We knew from the outset that we did not want to sell our family home,” says Amanda, who did not give her surname.

“We have a strong attachment to our mother’s home and we also thought it was important for us as a family to retain the property in order to pass it on to our children and grandchildren.”

When the property was valued by three independent assessors after Amanda’s mother’s death, it was decided to be worth £788,000 – a real terms increase of more than 1,200pc.

Her total estate was valued at £825,000 – most of which was because of the property’s high value, which meant the family was saddled with an inheritance tax bill of £130,000.

Still grieving their mother, the family frantically set about trying to stump up the cash. The sisters exhausted their savings, and Amanda, who suffers from joint issues, sold her wheelchair-adapted car.

But the high value of the property caught the attention of the Valuation Office Agency, which again assessed the property in line with similar homes in the area – adjusting the home’s value to £1.3m. This increased the tax bill to £206,000.

It was not until Amanda’s family pushed back that the VOA’s valuation was overturned. But Amanda says she is “still reeling” from the experience of emptying her savings to pay off the original tax bill.

“My sister struggles to afford necessities for her children and I cannot transport my wheelchair in the car that I ended up leasing from the Motability Scheme,” she says.

“We don’t even have enough money to put a headstone on the grave.”

The sisters have had to continue to borrow money to bring their mother’s property in line with modern standards.

“Even for those with very modest incomes, inheritance tax is a tax on aspiration and generational progression,” she says. “People say barely anyone has to pay for it because it’s just a tax on the rich, but it’s not.”

It comes as Chancellor Jeremy Hunt has frozen inheritance tax allowances until April 2028.

Ammo Kambo, financial planner at wealth manager RBC Brewin Dolphin, says: “This will ultimately mean that more estates are subject to inheritance tax and even those that don’t regard themselves as ‘wealthy’ may find that their estates are liable to this tax.”