The Conservative party would allow families to pass on up to £2m of assets free of inheritance tax (IHT) if it were elected, it emerged last week.

It had already announced that it would raise the inheritance-tax allowance to £1m, and last week it confirmed that it would allow married couples to transfer this to their spouse on death — thereby in effect doubling the survivor’s threshold to £2m.

That is more than three times the present £624,000 allowance for spouses — raised from only £300,000 last year and due to be lifted to £700,000 by 2010.

Increasing the IHT threshold to £1m would enable about 9m families to escape the unpopular 40% tax, and pushing it up to £2m would enable even more to pass on their assets without charge.

A Conservative party spokesman said: “We would keep the automatic transferability of the nil-rate band, if it is still in place when we are elected, and we would raise the nil-rate band to £1m per person. This has always been our position — it’s just that we haven’t shouted about it.”

Fewer than 50,000 estates were liable for IHT in the financial year 2007-8.

The ability to transfer your IHT allowance to your spouse, whether under the Conservatives or Labour, brings into question the need for the trusts still being marketed by accountants and financial advisers. They can be expensive to set up and, with the doubling of the allowance, may be unnecessary for many families. We answer your questions.

How does the transfer of an IHT allowance to a surviving spouse work?

The ability to transfer your IHT-free allowance to a surviving spouse on death is what has pushed the Conservatives’ threshold to £2m and the Labour limit to £624,000.

However, many people are confused about how this works, while recent figures from Zurich Financial Services show that only one in three people is aware of the changes that have raised the IHT bar.

Under rules introduced in the pre-budget statement last year, married couples and civil partners can transfer the unused part of their IHT nil-rate band — the value of the estate not subject to IHT, now £312,000 — to their surviving spouse or civil partner when they die.

To make the transfer, however, widows and widowers must have the necessary paperwork to prove that the deceased spouse did not use the IHT allowance in his or her own right.