Transferring Unused Inheritance Tax Allowance Between Spouses

One of the most valuable reliefs in inheritance tax planning is also one of the most frequently missed: the ability to transfer unused inheritance tax allowance between spouses and civil partners. If your husband, wife or civil partner died before you and left some or all of their estate to you, their unused nil-rate band does not disappear. It can be added to your own allowance when you die, potentially doubling the amount your estate can pass on tax-free. Here is how the rules actually work.

The basic nil-rate band and how transfer works

Every individual has a nil-rate band of £325,000, the amount of their estate that can pass free of inheritance tax. If a spouse or civil partner dies and leaves everything to the survivor, none of their nil-rate band is used, because transfers between spouses and civil partners are exempt from inheritance tax. The unused percentage, not a fixed amount, is carried forward. When the surviving spouse later dies, their estate can claim that same unused percentage as an uplift to their own nil-rate band.

In practice, this means that if neither nil-rate band was used on the first death, the surviving spouse’s estate can benefit from a combined nil-rate band of up to £650,000 before any inheritance tax is due.

The residence nil-rate band works the same way

Since 2017 there has also been a residence nil-rate band of £175,000, available where a qualifying residence is left to direct descendants such as children or grandchildren. Like the basic nil-rate band, any unused percentage of the residence nil-rate band can also be transferred to a surviving spouse or civil partner. Taken together, a surviving spouse’s estate can therefore shelter up to £1 million from inheritance tax if both allowances were entirely unused on the first death, using the residence nil-rate band alongside the standard allowance and claiming both transfers.

How the claim is actually made

Transfer is not automatic. The executors or administrators of the second estate must make a formal claim to HMRC. For the basic nil-rate band this is done using form IHT402, submitted alongside the main IHT400 inheritance tax return. For the residence nil-rate band, the equivalent claim is made on form IHT436. Both forms ask for details of the first death, including when it occurred and what proportion of each allowance, if any, was used at that time.

The two-year time limit

There is a strict time limit for making the claim: it must be submitted within two years of the end of the month in which the second spouse or civil partner died, unless HMRC agrees to extend this in exceptional circumstances. Because the claim depends on evidence from the first death, sometimes many years earlier, it is worth locating the grant of probate, the will and any record of how the first estate was distributed as early as possible in the second administration.

What if the first spouse died a long time ago?

The transfer is available no matter how long ago the first death occurred, even if it was decades before the nil-rate band reached its current level, and even if no inheritance tax return was needed at the time because the whole estate passed to the surviving spouse. What matters is the percentage of the allowance that was unused, not the amount in pounds at the time. Our broader guide to inheritance tax thresholds, rates and reliefs for 2026/27 explains how the nil-rate band and residence nil-rate band interact with other reliefs.

Unmarried and cohabiting couples cannot claim this relief

This transfer is only available to married couples and registered civil partners. Unmarried couples, however long they lived together, cannot transfer unused allowances between them, which is one of several reasons cohabiting couples are often significantly worse off for inheritance tax purposes than married couples in similar circumstances.

How Curtis Legal can help

Working out exactly what was unused on a first death, particularly where it happened many years ago or where some lifetime gifts were made, can be surprisingly detailed work. Our inheritance tax team regularly prepares these claims as part of full estate administration. You can read more about our approach to inheritance tax, or browse our main probate guidance.

Frequently Asked Questions

If you are dealing with an estate where a spouse or civil partner died previously, call us on 0800 214 216 for a same-day callback and we will tell you what can be claimed.

Written by Simon Jenkins, solicitor and director of Curtis Legal Limited (Simon Jenkins SRA 167489; Curtis Legal Limited SRA 450129).