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croft
It's interesting that all this came from a story re: Council homes and the right to live in them for a lifetime and pass the right on to dependents. The argument is generally that by remving that right you'll be splitting up communities and so on.
Wouldn't the same issue be there with 100% IHT. If your parents live in London there's a good chance you wouldn't be able to afford that property (or one in the area) when they died, giving the same issue of splitting up communities.