From 6 April 2017, the Residence Nil Rate Band will become available for reducing the inheritance tax due on estates. The amount of the band will start at £100,000 rising in £25,000 increments until it reaches £175,000 from 6 April 2020.
At that point a married couple will have nil rate bands totalling £1,000,000 provided that there is a residential property (occupied at some point as their home) in the estate worth at least £350,000.
There is a specific allowance in the rules so that downsizing allows you to keep the extra nil rate band based on the value of a property you previously lived in.
This should lift a lot of couples whose estate is up to £1 million out of the IHT net and not before time.