Government Response

The Government responded to this petition on Friday 27th May 2016

Government recognises the natural desire of people to work hard and pass on assets to their family but must balance this against the important contribution that inheritance tax makes to the exchequer.

That’s why the Government is delivering its manifesto commitment to take the family home out of inheritance tax for all but the richest families. This will be achieved through a new transferable residence allowance, which will create an effective £1 million inheritance tax threshold for many families. From April 2017, this new allowance is being phased in for all individuals who leave their home on death to their child or other direct descendants. Combined with the existing transferable threshold of £325,000, this means many individuals will have an inheritance tax threshold of £500,000, and ultimately many surviving spouses and civil partners will have an effective threshold of £1 million by 2020-21.

As a result of delivering this manifesto commitment, around 94% of estates are forecast to be able to pass on all their assets without paying any inheritance tax. The number of estates facing an inheritance tax charge in 2020-21 will be almost halved compared to the forecast before the Summer Budget 2015 and thousands more will pay less.

H M Treasury