MINISTERS are to impose a £95,000 “stealth tax” on inheritance to help pay for care for the elderly.

In a blow to families with valuable property and other assets, the Treasury will freeze the amount that people can inherit free of tax, rather than raise it in line with inflation.

The decision comes just eight weeks after George Osborne, the chancellor, promised to increase the amount in two years’ time.

Now he has decided it will not go up until at least 2019, leaving thousands of families £95,000 worse off than if the tax free allowance had risen.

The effect will be doubled when two parents die, because the £325,000 inheritance tax threshold is transferable between married couples. This allows offspring to inherit up to £650,000 without

In the meantime Expats are calling for inheritance tax to be scrapped after more than 15 years of living overseas if voting rights are also lost.

Under the current rules, any British citizen who has lived outside the country for 15 years then loses their right to vote in general elections. This is currently being legally challenged by a number of expats.

The Government’s argument for scrapping voting rights is that an expat is out of touch with UK politics after 15 years overseas. Expats argue their assets should also be out of touch from the Government after the same period.

If you are domiciled in the UK inheritance tax is charged on all your assets, wherever they are situated across the world. But if you are domiciled abroad, then inheritance tax only applies to your UK assets.

There is a flat rate of 40 per cent charged on assets above a £325,000 threshold per person.

Ar deVere group we advise on ways to reduce inheritance tax.

Nigel Green deVere Group