How to lose less

The most cost-effective way of reducing your inheritance tax liability is to make full use of the exemptions for spouses.

A married person - but not a cohabiting one - can pass on all their wealth to their partner without paying a penny.

At the same time they can use their "nil-rate" allowance to pass on ?263,000 to their children.

However, this can often leave the surviving partner without enough assets to live on, forcing the sale of the family home. A way round this is to split ownership of the home so that the married couple are "tenants in common" rather than the more usual "joint tenants".

This will allow the first partner to die to bequeath his or her share of the house to a trust - making full use of the nil-rate allowance - while the surviving spouse continues to live in it.

It sounds complex but a lawyer could easily make the necessary changes to a will, saving hundreds of thousands of pounds.