Martin Lewis says escape inheritance tax with a common document
Martin Lewis says people can be "exempt" from inheritance tax with one vital document. The BBC Sounds podcast host spoke out on the latest episode of the show, discussing inheritance tax amid rumours of a planned shake-up from the Labour Party government.
ITV regular Martin said: “When you get married you can pass on anything you like when you die and there is no Inheritance Tax on it. But arguably even more importantly than that, you can pass on your unused allowance.
"So you get £325,000 that is exempt from Inheritance Tax, and a possible £175,000 on top if you’re passing your main home onto your descendants. But if you’re passing it on to your spouse and they pass it on, then they get your allowances too which means add them all together and that's £1M of property and estate that can be passed onto direct descendants without any Inheritance Tax.
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“If you weren’t married - and by married we also mean civil partnerships here - you’d only be able to pass on a maximum of £500,000.” All you need is a marriage certificate, or an equivalent civil partnership certificate, Mr Lewis explained.
Separately, Money Saving Expert has explained if you're married or in a civil partnership and under 89 years old, you may be entitled to a £1,260 tax break called the marriage tax allowance – something around two million qualifying couples miss out on. It's really easy to apply and take advantage of this tax break.
One Money Saving Expert reader explained: "I made a claim for this year and previous years. I was amazed to get a rebate of £1,100. My wife is terminally ill and this money will enable us to tick off another part of her bucket list. I cannot tell you how grateful we are."
And a second said: "Many thanks for your tip on transferring my wife's tax allowance. I have just received a cheque from HMRC for £994.66. "