Money expert Martin Lewis has outlined a way to avoid paying Inheritance Tax and save as much as £200,000 on assets worth £1million.

Martin returned on his The Martin Lewis Podcast on BBC Sounds, Spotify and Apple Music on Thursday with another slate of financial wisdom relating to everything from Council Tax to Cash ISAs. In one tip he shared with co-host Adrian Chiles, Martin explained how couples can save potentially hundreds of thousands of pounds of Inheritance Tax simply by tying the knot.

That’s because there are tax savings that married couples - or couples in a civil partnership - can take advantage of that unmarried couples simply cannot, even if they’ve lived together for decades or have children together. Or both. Martin Lewis said: “I thought it might just be worth explaining to you what the benefit of marriage within the Inheritance Tax world is. It’s actually pretty substantial.

“Now when I talk about marriage this is anybody who is married or has a legal civil partnership but this does not apply to you if you are just cohabiting.

“So the two big Inheritance Tax benefits: first of all, your spouse won’t pay Inheritance Tax you leave to them. When you die, any money, any assets, that gets left to your spouse is automatically exempt from Inheritance Tax. So there’s no Inheritance Tax to pay on that.”

But, Martin added that the ability to pass on Inheritance Tax allowance to your spouse is even more useful.

He continued: “But an even more important Inheritance Tax boon of marriage is you can pass on your unused Inheritance Tax allowance to your spouse. So in plain speak, you don’t pay Inheritance Tax on the first £325,000 you leave when you die. Above that, if you’re leaving your main residence to your direct descendants, you usually get - not in every case - another £175,000 on top. So that’s £500,000 that you can leave without paying tax on it.

“So if you leave everything to your spouse when you die, you haven’t used any of those allowances, and as they’re unused, they get passed on to your spouse.

“That means that when your spouse passes away, they get your allowance and yours, which means if you’re leaving a main property, they can then leave £1M that they can pass on without paying Inheritance Tax on it.

“That’s a huge benefit and that’s why it’s often worth looking at getting married (or a civil partnership, it counts in exactly the same way).”

Martin then gave an example of two couples who have £1M of assets including property, one married and one unmarried.

He explained: “Let me just try and do this off the top of my head, so let’s say you and your partner have combined £1M of assets. When the first one of you dies, you leave everything to the other one, well you just used, cos your stuff is worth £500,000, £500,000 of your Inheritance Tax allowance. So now your partner has £1M of assets, when they die they pass that on to your children, that’s £500,000 that would pay Inheritance Tax at 40%, that’s a £200,000 Inheritance Tax bill.

“Now let’s contrast that to our married couple. In our married couple, they’ve got £1M of assets, the first one dies, all of their assets go to their spouse and their unused Inheritance Tax allowance goes to their spouse. Because they’re passing it to a spouse it didn’t count, so then, when the second one dies, they get to leave the entire £1M to their children, Inheritance Tax free, a tax saving of £200,000.”

The Martin Lewis Podcast from Thursday, June 5 is still available via BBC Sounds, Spotify and Apple Music.