If someone dies after the 9th October 2007, it is possible to transfer any unused portion of a deceased spouse or civil partner’s inheritance tax, also known as the Nil Rate Band.

 

Everyone has the same basic tax-free allowance before they must pay Inheritance Tax. The current threshold is £325,000. If the threshold has not been fully used when the first person in a marriage or civil partnership dies, you can transfer it. The unused part can go to the surviving spouse or civil partner.

 

The basic tax-free allowance available when a spouse or civil partner dies can be as much as £650,000 if none of their £325,000 threshold was used when the first partner of the couple died.

 

The percentage of the threshold that was not used when the first partner died increases the basic threshold that’s available for the surviving partner’s estate.

You can only transfer threshold if:

• the couple were married or in a civil partnership when the first death occurred

• you send the request to HMRC within 2 years of the death of the surviving spouse or civil partner