We are celebrating this festive time of year with a Christmas Selection Box of different tax reliefs and exemptions. As it is the time for giving and sharing, we hope that our "Box" will save you pounds rather than adding them!


T is for Transferable nil rate band

Each individual subject to UK Inheritance Tax (IHT) has the benefit of a nil rate band which is currently £325,000.

An IHT transferable nil rate band is applicable to deaths on or after 9 October 2007.

    • When one spouse or civil partner dies before the other and part or all of their nil rate band (NRB) is not used, the unused NRB can be transferred to the surviving spouse to be added to their own NRB and used on their death.
    • As there may be a considerable period between the death of the first spouse or civil partner it may be difficult to prove what if any nil rate band has been transferred.
    • HMRC will require details of the IHT history of first death in order to agree any claim made on the second death.
    • The spouses must have been married, i.e. not divorced at the time of the death of the first spouse but there is no requirement that they are living together at the date of the first death.
    • The NRB is available to all individuals; if you are a non-domiciled individual and die in the UK with UK assets your spouse may be able to benefit from a transfer of your unused nil rate band.
  • A claim must be made by the personal representatives on form IHT402 , no later than 2 years after the end of the month in which the second death occurs.

Transferable nil rate band: hacks 

  • Spouses who died many years ago can be forgotten when their spouse then dies at a much later date .In these situations the transferable NRB of the spouse who died a long time ago can be overlooked and sometimes the family are not even aware of the earlier marriage.
    • As part of will and estate planning make sure your family and/or executors are aware of all your marriages!
  • Make sure you keep all documents and records where there is a transferable nil rate band available following the first death of a member of a couple or civil partnership.
  • If the will was written before transferable nil rate band was introduced and has never been amended consider whether a better IHT position can be acheived using a deed of variation to rewrite the will. 

Our selection box so far..

C - H - R - I - S -T - M A S


Useful subscriber resources:

IHT: transferable nil rate band

IHT: non-domiciled spouse

IHT: estate planning checklist

Main Residence Nil Rate Band (RNRB)

At a glance:

Transferable nil rate band

Inheritance tax rates & allowances

Gifts and lifetime giving