George Osborne has just announced in his Summer Budget that today there are more families pulled into the inheritance tax net, despite is originally being designed to be paid by the very rich.

“It’s not fair and we will act,” Osborne declared.

“From 2017, we will phase in a new £175,000 allowance for your home when you leave it to your children or grandchildren.

“It sits on top of the existing £325,000 threshold which will be fixed until the end of 2020-21.”

Osborne added that from today, those who choose to downsize will not lose any of the allowance from the property they used to own.

“But we will taper the relief away for estates worth more than £2 million,” he added.

“You can pass up to £1m on to your children free of inheritance tax.

“No more inheritance tax on family homes.

 “Promise made – promise delivered.”

Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, commented: “Today’s announcement has given the government’s property death tax a new lease of life and is a small step in the right direction.

“As many predicted, the abolition of inheritance tax up to the £1m has thrown many a small bone.

“Personally I feel it an outrage anyone should have to pay tax to pass their estate to the next generation of their family, regardless of the value of it, having paid tax on it in various government guises throughout their life.

“To put this into perspective, this affects 98% of property transactions so far in 2015, which have been under the £1m threshold.

“I think George Osborne has used it as a bit of a smoke screen to detract from the glaring issue of housing supply, which he has yet again failed to address in any meaningful way.”

Mark Hayward, managing director of the NAEA said: “We fear that Osborne’s decision to raise the inheritance tax relief threshold to estates worth <£1m could have unintended consequences on helping buyers move up the housing ladder.

“Increasing the inheritance tax relief threshold will create tax incentives for estate holders to remain in one property for longer periods of time, thus leaving less affordable housing available for buyers.

“We urge the Government to carefully consider actions that will upset the balance between supply and demand further.

“This will have a knock-on effect on those lower down the property chain. The ability to own a home is an aspiration built within our psyche, and the Government needs to act to ensure that first time buyers are not driven out of the property market once and for all.”

Andy Knee, CE of LMS said: “Increasing the Inheritance Tax threshold will allow richer households to pass on a greater chunk of their savings pot to children and grandchildren, primarily benefitting those in London and the South East but of little gain to anyone outside these areas.

“While those who downsize maintain an Inheritance Tax ‘credit’ thereby encouraging wealthy older people to free up larger houses, this could still lock out those young people without a hefty inheritance or financial backing from their parents.”

Richard Pike, Phoebus Software sales and marketing director added: “The move will make a real difference to middle income families and won’t cost the tax payer if it’s budgeted for correctly.”

Alistair Bingle, Managing Director at removals company, Bishop's Move, said: “It says a lot about the rate of growing property prices when this threshold change could benefit in excess of 90% of property owners.

“It is a glaringly obvious fact that homeowners would prefer to hand down their properties to their children and this has not always been possible due to inheritance tax liabilities.

“People are already arguing that this amendment will benefit the wealthy.

“Whilst there is some substance to this statement, the question still stands; why should homeowners, regardless of wealth, be subjected to inheritance tax on the family home which many plan to leave to their children?

“This is the first big change in inheritance tax for some time.

“By protecting people who wish to downsize and who were worried about missing out on this tax break, this will enhance the performance of the UK property market which is often the anchor of the UK economy.”

Vince McLoughlin, partner at business & tax advisory firm, Russell New, added: : “The problem with inheritance tax is that many individuals caught under the £325,000 threshold feel they are leaving a relatively modest inheritance to their family and yet it is subject to a tax which is seen by many as intended to target wealthier people.

“The freezing of the IHT threshold coupled with rising house prices throughout large parts of the UK have made the current inheritance tax threshold somewhat inadequate and it’s the right time for a change.

“This is a tax which hits people who have worked hard throughout their lives and who simply want to provide for their children after they die.

“Building up a legacy for our children and grandchildren is one of the reasons we go to work in the morning.

“By announcing that the threshold will be raised, middle-class families who are not mega-rich should be able to leave their house to their children without having 40% taken off the value.”