The chancellor delivered a tax boost to middle England by signalling an increase in the threshold for payment of inheritance tax (IHT) from £275,000 to £325,000 over the next four years.

In raising the IHT nil rate band by £50,000, beneficiaries of larger estates will pay £20,000 less in tax (paid at 40 per cent) by 2009-10. Mr Brown said 94 per cent of estates would not pay any IHT.