Assets exempt from inheritance tax will likely rise in popularity over the next year as more households move past the frozen tax threshold.

In March 2021, prime minister Rishi Sunak – then chancellor – froze the nil rate band at £325,000 until April 2026.

Then last month in his Autumn Statement, current chancellor Jeremy Hunt extended the freeze by a further two years, to 2028.

Any estate which exceeds the £325,000 threshold is charged 40 per cent in IHT.

The further freeze is expected to push up IHT receipts from £6.1bn in 2021/22 to £7.8bn in tax year 2027/28 – an increase of 28 per cent or £1.7bn, according to Office of Budget Responsibility figures.

If the nil rate band had risen in line with inflation, today it would be worth £407,000 and projected forward to tax year 2027/28 it would be over £500,000.

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