Surrey pays more inheritance tax than Wales and Northern Ireland combined

Helen Thornley, of the Association of Taxation Technicians, said this extra allowance for passing on homes made it even harder for regular families to plan around the tax.

She said: “It does not seem logical that the way you are taxed depends on where you hold your wealth. A person with a £200,000 home and £600,000 in investments will pay more inheritance tax than someone with a £600,000 home and £200,000 in investments.

“This makes the tax very difficult to administer. Plus you have various replacement property provisions, so if you own a house and sell it, sometimes that cash counts towards your estate.

“The whole thing is so complicated that often you will need a lawyer or an accountant to advise on it, and that means paying expensive fees.”

While property prices in Wales are low, they are climbing faster than the national average, suggesting more homeowners in the country may eventually be dragged into the tax bracket. Property prices in Wales rose 4.8pc in March, compared with an average 4.1pc rise across Britain.

A spokesman for the Treasury said: “More than 93pc of estates aren’t expected to pay any inheritance tax in the coming years – however the tax still raises more than £7bn a year to help fund public services like the NHS and schools.

“Estates of surviving spouses and civil partners can pass on up to £1m without an inheritance tax liability – significantly more than the average UK home of £285,000.”