The new main residence nil rate band will mean there will be less inheritance tax to pay on the family home for deaths from April 2017 provided it is left to a close relative, defined as children or grandchildren.
The relief will be fully available by 2020, increasing from £100,000 in April 2017 to £175,000, when up to £1m can be left tax free by a married couple in certain circumstances rather than the existing £650,000, two nil rate bands of £325,000. This equates to a further maximum inheritance tax saving of £140,000.
The increased tax relief will, however, be tapered if an individual's total estate is more than £2m.
There is also some provision for those who downsize their house on or after 8 July 2015.
There will be no increase in the nil rate band until at least April 2021.