Inheritance tax: HMRC decides who should pay | Personal finance | Finance

Inheritance tax is often considered one of the most hated taxes, but there are ways to ensure that loved ones pay less to HM Revenue and Customs (HMRC) – or avoid it altogether. Overhauling the rules could save Britons a fortune, according to writer Graham Southor.

However, he went on to explain that a couple could pass on up to £1million without leaving loved ones with a hefty tax bill.

He explained: “If you have a house and you pass it on to children or other direct family members, you can claim an additional £175,000.

“If you are married or in a civil partnership, there is no inheritance tax to pay when the first partner dies – everything rests with the second partner.

“The good news is that the second partner can use any unused allowances, so remember it’s the £325 and £175 which means a couple can pass on up to £1million free of tax – anything over – the excess amount – is taxed at 40 percent.

READ MORE: Three ways people can ensure their children pay less inheritance tax

Mr Southorn told in March why he thinks Britons shouldn’t give children their homes before they die – because it could really complicate things and not save money.

He said: “People think, ‘I’m going to give my house to my children’ but unless you pay market rent, you can’t.

“You may be able to donate some of it, but it only works for high-value homes.

“It can be very complicated – in many cases it’s best to speak to a professional.”

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