The residence nil rate band has been gradually introduced since April 2017. This is added to your existing threshold. The initial allowance was £100,000 in 2017, then it was raised to £125,000 in 2018/19. It will be £150,000 in 2019/20 and the final amount will be £175,000 in 2020/21. This new allowance will only apply if you want to pass your home to a direct descendant like a child or grandchild, therefore not everyone will be able to take advantage of it.

When added to your existing threshold, this could potentially give you an overall allowance of £500,000 if you are single or divorced, or £1 million if you are married or in a civil partnership.