Families could cut their inheritance tax bills by thousands of pounds by using a little-known rule that allows them to adjust the valuation of the estate of a deceased relative if house prices have fallen.
The recent decline in property values, especially in London, makes the tax concession particularly valuable now. House prices in the capital fell by 4.4pc in the year to May, the biggest drop in a decade, according to data published last week by the Office for National Statistics.
This follows a general slowdown in house price growth over the past three years, driven mainly by market slumps in the south and east of England.
As a result of these falls, many families risk paying too much inheritance…