Yes — the inheritance tax allowance does pass to a surviving spouse or civil partner. When one partner dies, any unused portion of their £325,000 nil-rate band transfers to the survivor’s estate, and the same rule applies to the £175,000 residence nil-rate band when a home is left to direct descendants. Together, a married couple or civil partnership can pass on up to £650,000 tax-free, rising to £1 million where a family home goes to children or grandchildren.
Why Transfers Between Spouses Are Tax-Free
Section 18 of the Inheritance Tax Act 1984 treats any transfer of assets between spouses or civil partners as an exempt transfer. The size of the estate makes no difference. A spouse can inherit £5 million or £50 million without triggering any inheritance tax.1Legislation.gov.uk. Inheritance Tax Act 1984 Section 18 Property, savings, investments, personal belongings — all of it passes without charge. Lifetime gifts between spouses are covered by the same exemption, so there is no seven-year survival requirement for anything given to a husband, wife, or civil partner.2GOV.UK. How Inheritance Tax Works Thresholds, Rules and Allowances – Rules on Giving Gifts
The practical effect matters more than the rule itself. When the first spouse dies leaving everything to the survivor, none of the deceased’s £325,000 nil-rate band gets used up. That full allowance is preserved and can then be claimed by the survivor’s estate later.
How the Transferable Nil-Rate Band Works
Every individual has a nil-rate band of £325,000. Anything above it is taxed at 40%. The threshold has been frozen at £325,000 since the 2009–10 tax year and will stay there until at least the end of the 2030–31 tax year.3GOV.UK. Inheritance Tax Thresholds
When a spouse or civil partner dies without fully using their nil-rate band, the unused portion transfers to the survivor. The mechanism works on percentages rather than fixed pounds. If the first spouse left everything to the survivor, 100% of their allowance transfers. If the first spouse gave £162,500 to a child — half the £325,000 threshold — then 50% transfers.4HM Revenue and Customs. Inheritance Tax Nil-Rate Band and Residence Nil-Rate Band Thresholds From 6 April 2026 to 5 April 2028
The percentage approach protects families if the threshold ever rises. Whatever percentage was unused at the first death gets applied to the nil-rate band in force at the second death. With the threshold frozen for years, the numbers currently work out the same way — but the mechanism is built to move with future changes.
There is a ceiling. The transferred allowance can never lift the survivor’s threshold by more than 100%. The combined maximum is always two nil-rate bands, giving £650,000.4HM Revenue and Customs. Inheritance Tax Nil-Rate Band and Residence Nil-Rate Band Thresholds From 6 April 2026 to 5 April 2028
The Extra Allowance for a Family Home
Families passing a home to direct descendants get a second layer of relief. The residence nil-rate band (RNRB) adds up to £175,000 of tax-free allowance per person when a property is left to children, stepchildren, grandchildren, or their spouses. It is frozen at £175,000 until the end of the 2030–31 tax year.3GOV.UK. Inheritance Tax Thresholds
The RNRB transfers between spouses on the same percentage basis as the standard nil-rate band. If the first spouse used none of their RNRB, the full £175,000 passes to the survivor. Stacked together with the two standard nil-rate bands, a couple can shield up to £1 million from inheritance tax: £325,000 plus £175,000 each.5HM Revenue and Customs. Inheritance Tax Nil-Rate Band, Residence Nil-Rate Band From 6 April 2028
Wealthier estates lose the RNRB gradually. It tapers by £1 for every £2 the estate’s net value exceeds £2 million. For a single person, the £175,000 allowance disappears entirely at £2.35 million. For a survivor claiming a transferred RNRB on top of their own, the combined £350,000 is fully wiped out once the estate exceeds £2.7 million.5HM Revenue and Customs. Inheritance Tax Nil-Rate Band, Residence Nil-Rate Band From 6 April 2028
What Reduces the Amount That Transfers
Gifts made to anyone other than a spouse within seven years of death eat into the nil-rate band, and that reduces how much transfers to the surviving partner. If someone gave £200,000 to a child four years before dying, that gift consumes part of the £325,000 allowance. Only the remaining percentage is available for transfer later.2GOV.UK. How Inheritance Tax Works Thresholds, Rules and Allowances – Rules on Giving Gifts
Taper relief is a common source of confusion. It can reduce the tax charged on a gift made three to seven years before death, but the gift still counts in full against the nil-rate band for transfer purposes. Taper relief affects the rate applied to the gift itself, not the amount of allowance used up.
Gifts between spouses are the exception to all of this. They are always exempt, regardless of timing, and they never reduce the nil-rate band.
When the Surviving Spouse Is Not UK-Domiciled
The unlimited spouse exemption has one significant restriction. Where the surviving spouse is not domiciled in the UK, the tax-free amount a UK-domiciled person can leave them is capped at £325,000, matching the nil-rate band. This is a lifetime cap: gifts made during the deceased’s life count towards it.1Legislation.gov.uk. Inheritance Tax Act 1984 Section 18
A non-domiciled spouse can elect in writing to be treated as UK-domiciled for inheritance tax purposes, which restores the unlimited exemption. A “death election” made after the UK-domiciled spouse has died must be filed within two years of the death. The trade-off is real. Once elected, the non-domiciled spouse’s worldwide assets fall within the scope of UK inheritance tax. The election lapses if the person is non-UK resident for income tax for three consecutive tax years.6HM Revenue and Customs. Inheritance Tax Election to Be Treated as Domiciled in the UK
Remarriage After Being Widowed
A person widowed and remarried can claim a transferred nil-rate band from a previous spouse, but only up to the 100% ceiling. Someone widowed twice cannot stack two full nil-rate bands from two deceased partners on top of their own. The maximum available is always two nil-rate bands combined, giving £650,000.4HM Revenue and Customs. Inheritance Tax Nil-Rate Band and Residence Nil-Rate Band Thresholds From 6 April 2026 to 5 April 2028
Careful will drafting can preserve more of the available allowances across a blended family. If the first spouse’s will leaves a legacy equal to their nil-rate band to children — either outright or through a trust — that uses up the first spouse’s own NRB, but the survivor keeps their own allowance intact. When the survivor later dies, their second spouse’s unused NRB can then transfer. Across the two deaths, the family may benefit from three nil-rate bands rather than two. This kind of structuring needs professional advice; the wording of the remarried spouse’s will has to avoid wasting the first spouse’s allowance.
How to Claim the Transferred Allowance
The transfer is not automatic. The personal representative — executor or administrator — of the surviving spouse’s estate has to claim it.
Two HMRC forms do the work. Form IHT402 claims the transfer of the unused standard nil-rate band.7GOV.UK. Inheritance Tax Claim to Transfer Unused Nil Rate Band IHT402 Form IHT436 claims the transfer of any unused residence nil-rate band, and if the survivor’s estate is also claiming its own RNRB, form IHT435 is needed alongside it.8GOV.UK. Claim Transferable Residence Nil Rate Band IHT436 Both go in with the main inheritance tax return, Form IHT400.
Supporting documents are required. Executors need photocopies of the grant of representation for the first spouse’s estate (or the death certificate if no grant was issued) and, where there was a will, a copy of that will along with any codicils or deeds of variation.9HM Revenue and Customs. IHT402 Claim to Transfer Unused Nil Rate Band The forms ask for precise figures on the first estate’s value and how much of the original nil-rate band was used at that time. When the first death was many years ago and no formal return was ever filed — because the first estate fell below the threshold — reconstructing those figures can be the hardest part of the whole process.
The claim has a deadline. It must be made within the “permitted period,” which is 24 months after the end of the month in which the surviving spouse died. If the personal representatives only begin acting later, they have three months from the date they first act, and whichever deadline expires later applies.10GOV.UK. IHTM43007 Claims and Time Limits Keep the paperwork from the first spouse’s estate safe. It is what unlocks the second allowance years or decades later.