Question to the HM Treasury:

To ask His Majesty's Government what would be the threshold for liability for inheritance tax today if the threshold had risen in line with the retail price index since 2010.

The estates of all individuals benefit from a £325,000 nil-rate band for inheritance tax. This has been fixed at £325,000 since April 2009.

The residence nil-rate band is a further £175,000 for those passing on a qualifying residence on death to their direct descendants, such as children or grandchildren. The residence nil-rate band was introduced in April 2017.

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. This is because any unused nil-rate band or residence nil-rate band is transferable to a surviving spouse or civil partner.

Where personal tax thresholds are not fixed, up until April 2012, they were indexed in line with the Retail Price Index (RPI) measure of inflation. As set out in the 2012 Finance Act, from April 2012, any personal tax thresholds that were not fixed were indexed in line with the Consumer Price Index (CPI) measure of inflation.

Had the nil-rate band not been fixed, HMRC estimate it would have been £508,000 in 2024-25.