Money Box

How can you legally reduce the inheritance tax your loved ones have to pay when you die? If you have accumulated substantial wealth during your life, inheritance tax can cost family and friends hundreds of thousands of pounds after your death. But there are legal ways to avoid being hit with a hefty IHT bill. Whether by donating to charity or giving away cash from surplus income, you can reduce the amount of inheritance tax due on your property, savings and other assets. But how does inheritance tax work and who is liable to pay it? What must your estate be worth before the 40% charge kicks in? And if you're married or in a civil partnership, what are the rules? £5.2 billion of IHT was paid last year, a record high. And yet, it’s still only a relatively small number of people whose estates are liable to so-called death duties. But many feel they’ve spent a lifetime earning the money and want to pass on as much as they can to their nearest and dearest. So how do you ensure you don’t pay unnecessary