IHT is payable when a person’s estate is worth more than what’s known as the ‘nil rate band’ of £325,000 when they die.
An additional allowance (the residence nil rate band) of up to £175,000 is available, where a family home is left to children, grandchildren or other lineal descendants.
If both allowances apply in full the first £500,000 of an estate would not be subject to inheritance tax, amounts over the nil rate band(s) would generally be subject to inheritance tax at 40 per cent.
He said: "There is no IHT payable on gifts made between spouses, either during their lifetime or on death (assuming both are UK domiciled).
"In addition if you’re married or in a civil partnership and you pass your estate to your spouse, any unused nil rate bands can be added to your spouse’s allowance when you die."
This has the effect of doubling the potential nil rate bands available so that the first £1m of a couple’s estate may not be subject to inheritance tax and defers any tax on assets above this amount until the survivor dies."
Rushton adds: “Another is the inter-spouse exemption on capital gains tax.
"When disposing of an asset, for example, a directly held investment or property which has increased in value, individuals have a capital gains tax allowance of £12,300 (for tax year 2022/2023) meaning £12,300 of the gain will not be subject to tax."
If the ownership of the asset was partly transferred to a spouse or civil partner prior to disposal, they would benefit from an inter-spouse exemption, which means the spouse or civil partner making the gift does not end up with a CGT bill"
If the asset is sold following the transfer of ownership there will be two £12,300 CGT allowances available, resulting in a lower tax bill – potentially saving as much as £3,444 tax when disposing an investment property.
"There is also the additional permitted subscription; since December 2014, those that are married or in a civil partnership can reinvest cash and investments in their spouses' Isa into an Isa in their own name (sometimes worth several hundred thousand pounds) enabling the survivor to continue enjoying income and growth from the Isa, tax free", he adds.
The allowance is called an APS, however, not all Isa providers accept the subscription so it is important to check.
6. Encourage them to save if they are single!
It is not all doom and gloom for the single client however.
Most local authorities in England and Wales offer a single person’s council tax discount of 25 per cent. This can be worth around £300 a year, yet many residents fail to claim the benefit.
