Inheritance tax giveaway to feature in first Tory budget alongside welfare cuts

Chancellor George Osborne set to unveil policy most likely to benefit higher earners on same day as setting out 12bn benefit reductions

George Osborne is planning to use his first Conservative budget to lift all but the very richest households out of inheritance tax on the same day he sets out billions of pounds in welfare cuts.

The move will allow a couple to pass a house worth up to 1m to their children or grandchildren. The chancellor will create a 175,000, tax-free allowance per person for their main property on top of their existing 325,000 allowance that can be applied to all assets.