Local estate agents Aston Mead have described the failure to increase the inheritance tax threshold to £1m in today’s Budget as “a missed opportunity”.

Plans to raise the threshold were included in the Conservative manifesto before the 2010 election, but failure to reach an outright majority meant the proposals did not make it into the Coalition agreement. However, in a speech last October, Prime Minister David Cameron repeated his intention to “shoehorn” the move into his final Budget before the General Election.

Aston Mead Managing Director Charles Hesse said: “The existing allowance is simply inadequate here in the South East, where house prices have increased substantially. Properties in Surrey and Berkshire typically cost more than the threshold at which the 40 per cent tax charge is triggered.”

The current threshold stands at £325,000 – although the last Government allowed the figure to be passed between husband and wife, so the effective threshold is now £650,000. The Government's forecaster, the Office for Budget Responsibility, has indicated that the proportion of estates attracting inheritance tax will double within the next four years - from one in 20 today to almost one in 10.

Charles Hesse added: “Families should be able to pass a family home on to their children tax-free. People should be spared the 40 per cent death tax on houses where many of them have lived for many years. Raising the limit to £1m in today’s Budget would have meant that their children would have benefitted, rather than the taxman.”

However, Charles Hesse was quick to praise the Chancellor’s announcement of a Help To Buy Isa, with an additional 25% deposit top-up for those buying their first property.

He explained: “In effect, this means that for every £200 a First Time Buyer puts into a deposit for their first home, the Government will add an extra £50. First Time Buyers are the heartbeat of the housing market – and although this move only serves to heighten the importance of building more homes across the country, we welcome the added impetus it will provide.”