The Inheritance tax threshold was raised by Gordon Brown in his budget, from £275000 to £325,000 over four years. However, the mortgage industry was disappointed by the move, which sees the threshold rise in year one by just £10,000 to £285,000.

Halifax calculated that the 2006/07 IHT threshold of £285,000 would now be £425,000 if it had been increased in line with house price inflation over the past 10 years.  House prices have risen by 176% in the past ten years, compared with just an 85% increase in the IHT threshold. Martin Ellis, Chief Economist at Halifax, said: “Inheritance tax is a tax intended for the few that the many now have to pay because of a failure to index link with house prices.”