Make bigger gifts
People can also transmit as much as they want without IHT, as long as they live at least seven more years from the date of payment.
Mr Davies said: ‘As long as you live for at least seven years after donating money, there will be no IHT to pay.’
Leave a legacy and donate to charity
Donations to charities are exempt from IHT provided they are made outright, according to Maria Lonergan, partner at JMW Solicitors.
These gifts can also reduce the inheritance tax rate for the rest of the person’s estate.
Ms Lonergan explained: ‘Where a person has died and a gift of 10% or more of a taxable estate has been made [to a charity]IHT rate [to paid on the rest of the estate] is reduced from 40% to 36%”.
According to a report, donations left in wills currently bring in £3.4billion a year, representing 16% of all income raised for UK charities, and that number is set to double further by 2050.
Use retirement allowance
Mr Davies said: “Pensions are generally not subject to IHT – they can be effectively taxed and in some cases even exempt from tax.
“If you have a retirement allowance left, use it.”
Create a trust
Trusts have traditionally been a staple of estate tax planning, according to Davies.
He explained: “They can mean the money falls outside an estate if you live for at least seven years after setting up the trust.”
However, he notes, “Taxes and related laws are complicated – you should seek specialist advice if considering this.”