Thresholds and rates
Transferable nil-rate band: measuring what the first spouse left unused
What passes from a late husband, wife or civil partner is a fraction of a band, not a sum of money. Getting that fraction right is most of the work.
The transferable nil-rate band lets the estate of a widow, widower or surviving civil partner add the share of the late partner's nil-rate band that went unused at the first death. HMRC's guidance on transferring unused thresholds measures that share as a percentage, and the percentage is then applied to the band in force when the survivor dies, not to the band of the year of the first death. The residence nil-rate band transfers on the same basis. Each transfer is capped at one full extra band, so a survivor's estate can reach £650,000 of nil-rate band plus £350,000 of residence band, both frozen until 5 April 2031. If the first spouse left £100,000 to children and the rest to the survivor, 69.2 % of the nil-rate band is unused. A survivor's estate of £1,100,000, home of £500,000 to the children, then has a threshold of £900,000 and pays £80,000.
Bands passed on at the first death
Second estate threshold
£900,000
| Nil-rate band transferred | 69.2 % |
| Inheritance tax at the second death | £80,000 |
Residence band assumed fully unused at the first death.
Law read and sums checked by Radif Partners · Editorial policy · How the tax is worked out
A fraction of a band, not a sum of money
Every person has a nil-rate band, and when the first partner of a married couple dies, the part of it not needed by that estate is not lost. The rule that keeps it alive is expressed in proportions. HMRC takes the band that applied at the first death, subtracts what was used by chargeable legacies and by gifts made in the 7 years before, and divides what is left by the band. The result, a percentage, is the only thing carried forward. At the second death it is multiplied by the band then in force and the product is added to the survivor's own band, as the HMRC guidance sets out.
Working in percentages protects older widowhoods. Someone whose wife died long ago, under a band of a different size, does not carry an old figure forward: if her estate used none of its band, the percentage is 100 % and the survivor's estate gets a full band at the value of the year the survivor dies. While the thresholds stay frozen until 5 April 2031, a percentage and a sum produce the same answer for a first death in recent years, but the method still governs every claim.
Legacies to children at the first death
The common way to use up part of the first band is a gift in the will to someone other than the surviving partner: cash to children, a share of the residue to grandchildren, a legacy to a sibling. Anything to the spouse or civil partner is exempt and uses nothing. Anything to a charity is exempt too. Everything else counts against the band. The table runs the second estate through the engine for different legacies at the first death, with the survivor leaving £1,100,000, a £500,000 home to the children, and the late partner's residence band untouched.
| Legacy to others at first death | Nil-rate band unused | Nil-rate band at second death | Total threshold | Tax at second death |
|---|---|---|---|---|
| £0 | 100.0 % | £650,000 | £1,000,000 | £40,000 |
| £50,000 | 84.6 % | £600,000 | £950,000 | £60,000 |
| £100,000 | 69.2 % | £550,000 | £900,000 | £80,000 |
| £200,000 | 38.5 % | £450,000 | £800,000 | £120,000 |
| £325,000 | 0.0 % | £325,000 | £675,000 | £170,000 |
| £400,000 | 0.0 % | £325,000 | £675,000 | £170,000 |
Two things stand out. A legacy that fits inside the first band costs no tax when it is paid but comes back, pound for pound at the rate of 40 %, at the second death whenever the survivor's estate is above its threshold. And a legacy above the band is taxed at the first death and leaves nothing to transfer, so the bottom rows show the survivor's estate falling back to a single band. The calculator above lets you change the legacy and the second estate.
Part of the home left to children first
The residence band has its own percentage, measured separately. Suppose the first partner's £400,000 estate included a £120,000 share of the family home, which the will left straight to the two children, with everything else going to the survivor. That share is closely inherited, so it uses £120,000 of the first estate's residence band and nothing of the nil-rate band. The unused percentages are therefore 31.4 % of the residence band and 100.0 % of the nil-rate band.
When the survivor later dies with the £1,100,000 estate used in the table, the threshold becomes £880,000 and the tax £88,000. In the first row of the table, where the first estate passed entirely to the survivor, the second estate paid £40,000. Leaving part of the home to the children at the first death uses residence band there and leaves less to carry over, so the comparison always needs both estates side by side.
When the first death came before 6 April 2017
The residence band did not exist before 6 April 2017, so no estate before then could have used it. The transfer rules treat 100 % of it as unused for any spouse or civil partner who died before 6 April 2017, unless their estate was worth more than £2,000,000. A widow whose husband died in 2010 can therefore have an estate claiming a full extra residence band today, even though he never owned a home. Her estate must still leave her own home, or her share, to direct descendants for either residence band to apply, as explained on the residence band page.
Widowed more than once
A person who has lost two spouses can bring two unused percentages to the claim, but the law sets a ceiling: the total added to the survivor's own band can never exceed 100 %. Take a widow whose first husband used 60 % of his band on legacies to his children from an earlier marriage, leaving 40 %, and whose second husband left everything to her. On paper her estate has 140 % to add; the ceiling cuts it to 100 %. Her estate of £1,100,000 has the same threshold, £1,000,000, as an estate with a single fully unused transfer, and pays £40,000. The same ceiling applies to the residence band.
Divorce, separation and couples who never married
The transfer depends on the couple being married or in a civil partnership at the first death. Divorced couples and former civil partners have nothing to transfer. Partners who lived together without marrying never qualify, which is one of several differences set out in the guide for unmarried couples.
Pensions and the percentage from April 2027
From 6 April 2027, unused pension money is part of the estate, and the spouse exemption in section 69 covers pension benefits paid to the surviving partner. A nomination is therefore one more place where the first band can be used without anyone noticing. Imagine a member with £150,000 of savings left to the spouse and a £240,000 pot nominated half to the spouse and half to two children. Before the change the children's half sat outside the estate and 100.0 % of the band stayed unused. For a death after it, the £120,000 paid to the children is chargeable, no tax is due because it fits in the band, and only 63.1 % of the band is left to transfer.
The second death has its own hazard. The transferred residence band is part of the survivor's band, so it is reduced by the taper once the survivor's estate, pension included, passes £2,000,000. The taper page works through that case, and the page on pensions left to a spouse follows one couple from the first death to the second.
Making the claim at the second death
Nothing is claimed at the first death: the transfer belongs to the survivor's estate and is claimed by its personal representatives. They have to establish the late partner's estate, the will or intestacy that applied, and the chargeable legacies and gifts, which can mean finding papers from decades earlier. Couples who keep the first estate's will and valuations together with their own papers spare the second set of representatives a search. A solicitor or the representatives themselves check the figures for a real estate; this page describes the rule and does not replace that check.