Summer Budget: Chancellor raises inheritance tax threshold to £1m

George Osborne has confirmed the inheritance tax (IHT) threshold will increase to £1m for couples, funded by a pension tax relief cut for people earning more than £150,000.

Osborne said the threshold at which the IHT is levied will rise for couples from £650,000 after April 2017. Currently, IHT applies at 40% on estates above a tax-free allowance of £325,000 per person. The Conservatives pledged in their election manifesto that, from April 2017, parents would each be offered a further - and transferable - £175,000 "family home allowance". "Promise made, promise delivered," said Osborne. Under the new rules, a couple with a house worth £1m will be able to pass it all, tax-free, to their children. The change has been funded by curbing pension tax ...