The reforms would take effect in 2017, if the Conservatives were to win an outright majority at next month’s general election. They will be funded by imposing higher taxes on pension savings of people earning more than £150,000 a year.

Under the new Conservative proposals, from April 2017 both parents would each be offered a further £175,000 ‘family home allowance’ to enable them to pass property on to children tax-free after their death.

This could be added to the existing £325,000 IHT threshold, and so bring the total transferable tax-free allowance from both parents in a married couple or civil partnership to £1m.

The full amount would be transferable even if one spouse had died before the policy came into effect, and so would benefit existing widows and widowers.

For properties worth more than £2m, the new allowance would be gradually reduced so that those with homes worth more than £2.35m would not benefit at all.

Outlining the details at the weekend, Cameron said: ‘We will take the family home out of inheritance tax. That home that you have worked and saved for belongs to you and your family - you should be able to pass it onto your children and with the Conservatives, the tax man will not get his hands on it.’

The Conservatives calculated that the changes would mean a couple with a house, savings and other assets worth £1m would see the inheritance tax bill on their estate fall by £140,000 to zero.

In its analysis of the Conservative plans, the Institute for Fiscal Studies (IFS) said the proposed cut in IHT would ‘go disproportionately to those towards the top of the income distribution’.

The institute says many features of the policy are similar to one analysed in a leaked Treasury document published last month. This estimates that, based on Budget 2014 forecasts, the policy would reduce the proportion of estates liable for IHT from 8% in 2015–16 to just over 6% by the end of the parliament, rather than see it rise to just over 10% under current policy.

The IFS points out that the Treasury document argues ‘there are not strong economic arguments for introducing an inheritance tax exemption specifically related to main residences’.

It cites a number of problems with the policy, including the fact that it would encourage investment in owner-occupied housing rather than other more productive investments and discourage downsizing late in life. Its analysis also suggests the Conservatives’ proposal would further complicate the IHT system, and says simply increasing the existing threshold from £325,000, which is due to be frozen through to 2017-18 would be a more straightforward approach.

The IFS is also critical of plans announced by both the Conservatives and the Labour party to significantly reduce the amount of income tax relief available on the pension contributions of those with an income in excess of £150,000.

It says such reforms would add considerable complexity to the pensions tax regime and would have the potential to distort savings behaviour and work incentives ‘in a significant and undesirable way’.