The additional inheritance tax free allowance applicable to those passing on property to direct descendants has led to some negative publicity surrounding the fact that it will only apply to transfers of such property on deaths falling on or after 6 April 2017. One of the arguments made is that the rules should instead apply from the date they were announced (namely in last year's budget). Where applicable, the allowance will be in addition to each individual's tax free allowance (nil rate band) of £325,000. The residence nil rate band, as it is known, will increase gradually from £100,000 in 2017 to £175,000 in 2020.
Nearly 30,000 families paying inheritance tax in the two years from April 2015 should be compensated because the Government has taken too long to implement changes, campaigners have said. A combination of soaring house prices and a spike in winter deaths has led to an "unlucky generation" of taxpayers footing a record £4.7bn IHT bill which is 20pc higher than last year's. Those receiving a raw deal have relatives who have died in between the Government announcing new, more generous inheritance tax rules in last year's Budget, and April 2017 when the changes are being brought in.