Tax free inheritance?  Here's how.  Implement World2Rights Inheritance Tax.  If you leave your money to a set of people who have not inherited much before, you will pay no inheritance tax at all.  The aim is to encourage redistribution of wealth within the private sector.

1. Everybody to be given a personal £150,000 Lifetime Inheritance Allowance (LIA). Until they reach that allowance, they will pay no tax on anything they inherit (including all significant gifts and capital transfers). After that cumulative limit is reached, inheritance tax will become payable.

Click here for information on transitional arrangements and the inheritance tax treatment of businesses.

2. After a will has been read, all beneficiaries will need to declare their tax status, summarising what they have inherited in the past. If they don't declare, their proportion of the estate will be taxed at the full rate.

3. Gifts and capital transfers will be treated in exactly the same way as inheritance, regardless of when transfers are made in someone's lifetime, and will count towards the cumulative Lifetime Inheritance Allowance (LIA). (But there will also be small annual ‘disregards’ for cash transfers and personal gifts).

4. Inheritance, gifts and capital transfers will be declarable as part of an individual's annual tax return (separate but alongside the income tax system). If someone doesn't normally make an income tax return, they will be able to use a simple form to make the new declaration (and only if certain annual 'disregards' are exceeded). The tax authorities will cross-reference the information provided by i) wills, ii) declarations by beneficiaries and iii) annual tax returns.

5. Because it will apply to a broader tax base, the inheritance tax rate will be reduced from the current level of 40%. Furthermore, every £1 left in a redistributive gift or bequest (i.e. to someone who has not inherited more than £150,000 before) will also earn a 10p tax offset. This will be available to offset inheritance tax due on any other part of the estate (up to a maximum of half of the tax due). This will provide a strong incentive for even the wealthiest individuals to redistribute a large part of their wealth.

6. Everybody will be entitled to one "Special Capital Transfer Relationship" (SCTR) with a spouse. After they first invoke this relationship, it will enable them to transfer an unlimited amount to or from their spouse, free of inheritance tax. This recognises that income and wealth is often the result of team-work between partners. However, to prevent tax avoidance and to encourage redistribution, there will be a strict limit of one SCTR within a lifetime. If it is used in a first marriage, the facility will not be available during a second marriage, for example. Also note that an individual's entitlement is used whether they are the net donor or the net beneficiary in the SCTR.

7. A range of standard legal documents will be made available to help people minimise the IHT due on their estates. For example, one format might use a ranked list of beneficiaries (perhaps relatives) – instructing that, in turn, each person on the list should benefit up to the limit of their tax-free LIA. The remainder of the estate would then benefit the next person on the list until they reached their tax- free LIA, and then the next person and so on.

Another format might identify a group who share a common bond - e.g. living in a certain area, within a certain age range or working for a certain employer. Potential beneficiaries would be given a certain time to declare their entitlement.

The aim is to encourage redistribution of wealth through the choices of individuals.

8. Gifts to certain charities (e.g. not animal, art, cultural or private schools) will be free of IHT.