THE TAX PERKS

One of the biggest financial allures of marriage is the savings it offers on inheritance tax (IHT).

While a small number of couples could structure their affairs to benefit from divorce in terms of IHT (see below), most benefit from being married.

The key benefit is that spouses can give each other assets free of IHT. They can also pass their individual IHT allowances (the basic allowance is £325,000 per person) to one another, giving a total £650,000. The incoming “main residence nil rate band” will add a further £350,000 per couple by 2020 (see left).

The ability to transfer assets taxfree between spouses can then be used in conjunction with another IHT loophole: the fact that gifts to children and others made at least seven years before death escape IHT.

Bruce Forsyth, who died at the age of 89 earlier this month, is believed to have left his reported £17m fortune in entirety to his 59-year-old wife, Wilnelia, with IHT savings in mind.

Being married, no IHT is payable by his wife. Because she is considerably younger than him she has a longer time in which to “gift” assets and survive a further seven years, which will put them outside her estate for IHT purposes when she dies.

This could bring tax savings of many millions of pounds and yet still mean the assets end up with the beneficiaries originally intended.

Accountants point out the danger of such arrangements is that the surviving spouse has control of the assets.