There are several steps that can be taken to help mitigate Inheritance Tax (IHT) and pass on more wealth to loved ones and other beneficiaries.

As always is the case, everyone’s circumstances are different and we would always recommend that professional financial advice is sought by anyone who believes their estate could be liable for IHT – which is currently charged at 40% of assets such as money, shares and land, with a combined value above the nil rate band of £325,000. The band is frozen at this figure until 2020. An additional £100,000 exemption applies to a main residence or money released from a main residence if bequeathed to children, or grandchildren, this rises to £175,000 by 2020.

1. Make a will - a will helps executors know what your wishes are in respect of assets and can make things much smoother for family as everything is recorded and clearly stated. For IHT purposes, everything left to a spouse or registered civil partner is free from IHT. A professionally drawn-up will should be first on the list.

2. Using gift allowances - Everyone can give away £3,000 a year free of IHT. You can carry forward your annual exemption but only for one year. There are some smaller gift allowances, which can be used to extend this amount. For example, you can gift up to £1,000 per person for wedding or civil ceremony gifts (plus parental gifts of £5,000 for a child, £2,500 for a grandchild or great grandchild). You can also make gifts of £250 to an unlimited number of separate individuals and if you meet certain criteria, unlimited, regular gifts out of surplus income.

3. Pay into a pension plan - Following the pension freedoms, death benefits rules for defined contribution pension schemes mean your pension pot can be passed on free of IHT to your beneficiaries.

4. Business property relief - Certain business assets and particular investments could qualify for 100% relief from IHT after just two years of ownership as long as they are still held at date of death.

5. Put money in trust - Making gifts or lending money to trusts can help reduce an estate and the IHT bill. There are various types of trusts that can be set up nut professional advice is crucial. Gifts into trust take 7 years to become free of IHT.

6. Take out life insurance - If you don’t want to give money away, then you could consider taking out a life assurance policy and putting it into trust. When the policy pays out on your death, the proceeds can be used to pay the tax bill. This doesn’t save any IHT, it simply means that you pay a regular amount to an insurance company and an amount equal to the tax due on your estate can pass in its entirety to your family.

7. Leave money to charity - Leaving part of your wealth to non-family members may seem like a 100% loss to save 40% but it’s not that simple. If you leave more than 10% of your taxable estate to charity, the IHT rate of the balance falls to 36%.