An additional nil-rate band will be introduced where a residence is passed on death to a direct descendant. This will be £100,000 in 2017/18 and will increase by £25,000 each year until it is £175,000 in 2020/21.
This will affect individuals, with direct descendants, who have an estate (including a main residence) with total assets above the IHT threshold (or nil-rate band) of £325,000.
The changes mean that families could pass on up to a total of £1m to their children without paying inheritance tax.
