A significant change to Inheritance tax allowances was announced in the Chancellor’s budget this year (2015).

IHT is currently levied at a rate of 40pc on the value of an estate above the tax-free threshold, which has been frozen at £325,000 per person since 2009. Married couples and civil partners are entitled to double the allowance, passing on assets to their children or other relations worth up to £650,000 before a tax charge is triggered.

How will this change? The Government will add a “family home allowance”, eventually worth £175,000 per person, to the existing £325,000 tax free allowance from April 6, 2017. This will be worth £100,000 in 2017-18, £125,000 in 2018-19, £150,000 in 2019-20, and £175,000 in 2020-21. This will allow individuals to pass on assets worth up to £500,000, including a family home, without paying any IHT at all. For married couples and civil partners, the total is £1m.

This additional allowance will be gradually withdrawn for estates worth more than £2m.