It will cost families an extra £1bn and result in total receipts from the death tax soaring to an all-time high of £6.6bn by 2026.
The threshold has not risen since 2009. It would stand at more than £460,000 today had it risen with inflation each year since then.
Alex Davies, of the Wealth Club, said more people were looking to cut their bills and take advantage of legal reliefs to avoid paying more.
“With inheritance tax thresholds frozen until 2026, the amount families lose to IHT is only going one way and that is up,” he said.
Of particular concern is money that has built up in Isas over the years, which will be subject to the duty on death. Unlike pensions, which are exempt from the death tax, Isas – which protect savers from all other types of taxation – are not.
However, by filling an Isa with Aim shares that qualify for tax relief, families can shield the money they have accrued through years of diligent saving.
“Many of these stocks will qualify for something called Business Property Relief, which was introduced initially to help family businesses to be passed through the generations and has since been extended,” Mr Davies said. “If you hold these stocks in your Isa and do so on death, provided you have held them for at least two years, then they should be inheritance-tax free.”
Married couples can pass on up to £1m tax free by combining their £325,000 IHT allowances, plus their “family home allowance” of £175,000 each – an extra tax break for those leaving the family home to a direct descendent. Anything more than this will be taxed at 40pc.
A couple paying £20,000 a year each into a portfolio of Aim shares using their annual Isa allowance would have a 100pc tax-free pot of more than £1.5m after 20 years, assuming a 1.25pc yearly management charge and 7pc annual investment growth.
IHT-free Aim shares favoured by Questor, the Telegraph’s stock-picking column, include Naked Wines, the alcohol retailers; Boohoo, the online fashion website; and wealth advice firm Brooks Macdonald.
Aim companies tend to be smaller, making them a riskier investment. When markets crashed at the start of the pandemic, the FTSE 100 index of Britain’s biggest firms fell by a third, while the Aim market fell close to 40pc, although both have since recovered well.
