Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the impact of inheritance tax on middle-income households whose estates are primarily comprised of residential property, including the effect on their ability to fund social care costs; and what proportion of estates were liable for inheritance tax in each of the last five years.

Inheritance tax is only paid by a small number of estates. For the 2023-24 tax year, the most recent year available, fewer than 5% of UK deaths resulted in an inheritance tax charge.

No inheritance tax is due on any property, money, or other assets passed on to a spouse or civil partner, more widely, various nil-rate bands, exemptions, and reliefs exist including a £325,000 nil-rate band and a residence nil-rate band of a further £175,000 for those passing on a qualifying residence on death to their direct descendants, such as children or grandchildren. This means qualifying estates can pass on up to £500,000 and the qualifying estate of a surviving spouse or civil partner can pass on up to £1 million without an inheritance tax liability.

Information of the proportion of estates liable for inheritance tax is published online at the following:

https://www.gov.uk/government/statistics/inheritance-tax-liabilities-statistics/inheritance-tax-liabilities-statistics-commentary

Inheritance tax should not affect the ability of individuals to fund social care costs as it is only paid on the estate of someone who has died.