LONDON - British Prime Minister David Cameron has promised to cut inheritance tax so that parents will be able to pass on a family home worth up to 1 million pounds ($1.5 million) to their children without paying the tax, The Sunday Times reported.

Inheritance tax has become increasingly unpopular with many Britons as rising property prices, particularly in London, mean a greater proportion of people are liable to pay it.

In an interview with The Sunday Times, Cameron said the Conservative manifesto to be published this week will boost the threshold to seven figures from April 2017.

"This is a tax that is meant to be paid by the rich and not by hard-working families who have saved to buy a home and improve it," Cameron was quoted as saying by the newspaper.

The Sunday Times said the 1 billion pound annual cost of the plan would be paid for by reducing the tax relief on pension contributions for people earning more than 150,000 pounds.

Before the last election, in 2010, the Conservatives promised to raise the threshold at which the 40 percent inheritance tax on estates starts being paid to one million pounds from its current level of 325,000 pounds.

But Cameron failed to win an outright majority in 2010 and was forced to enter a two-party coalition with the centre-left Liberal Democrats who blocked his plans.

There is an effective threshold of 650,000 pounds for married couples at the moment.

Under Cameron's latest proposal, the individual tax-free allowance will be raised from 325,000 pounds to 500,000 pounds when a property is involved, giving a couple a shared 1 million pound tax-free fund, The Sunday Times said.