Transferable Nil-Rate Band: How Couples Pass on GBP 1m IHT-Free
How the transferable nil-rate band and residence nil-rate band let married couples and civil partners pass on up to GBP 1 million free of inheritance tax in 2026/27.
Quick answer
The transferable nil-rate band lets the unused part of one spouse's or civil partner's GBP 325,000 inheritance tax allowance pass to the survivor. Because gifts between UK-domiciled spouses are exempt, the first death often uses none of it, so the survivor's estate can claim up to GBP 650,000. With two GBP 175,000 residence bands added, a couple can leave up to GBP 1 million tax-free.
What the nil-rate band actually is
Inheritance tax (IHT) is charged at 40% on the value of an estate above a tax-free threshold. That threshold is the nil-rate band (NRB), fixed at GBP 325,000. Anything within the band is taxed at 0%; anything above it is taxed at 40% (or 36% where at least 10% of the net estate goes to charity).
On its own, GBP 325,000 does not stretch far against modern property values. The transferable nil-rate band exists to stop married couples and civil partners losing a band simply because they leave everything to each other first.
How the transferable nil-rate band works
When the first spouse or civil partner dies, transfers to the survivor are usually exempt from IHT under the spouse exemption. That means the first death frequently uses 0% of its nil-rate band.
The unused percentage is what transfers. On the second death, the survivor's personal representatives can claim that percentage on top of the survivor's own band. If the first estate used none of its band, the survivor gets 100% extra:
- First band: GBP 325,000
- Transferred band: GBP 325,000
- Combined: GBP 650,000
It is the percentage that carries over, not a cash sum. So even if the first person died many years ago when the band was lower - or before the rules began in October 2007 - the survivor still gets up to 100% of today's GBP 325,000 band.
A worked example
Imagine Anya dies first and leaves her entire estate to her husband, Ben. The spouse exemption means no IHT is due and none of Anya's nil-rate band is used. Ben later dies leaving an estate of GBP 600,000.
| Step | Amount |
|---|---|
| Ben's estate | GBP 600,000 |
| Ben's own nil-rate band | GBP 325,000 |
| Anya's transferred band (100%) | GBP 325,000 |
| Total nil-rate bands available | GBP 650,000 |
| Taxable estate | GBP 0 |
| IHT due | GBP 0 |
Without the transfer, Ben's estate would have faced 40% on GBP 275,000. The transferable band removes that charge entirely.
Adding the residence nil-rate band
On top of the standard band there is the residence nil-rate band (RNRB) of GBP 175,000. It applies when a main residence is left to direct descendants - children, stepchildren, adopted children, foster children or grandchildren.
Crucially, the RNRB is also transferable between spouses and civil partners, again capped at 100%. So a couple can potentially combine:
| Allowance | Per person | Couple total |
|---|---|---|
| Nil-rate band | GBP 325,000 | GBP 650,000 |
| Residence nil-rate band | GBP 175,000 | GBP 350,000 |
| Combined | GBP 500,000 | GBP 1,000,000 |
That is where the headline GBP 1 million tax-free figure comes from. It is a maximum, not a default, and only applies where a qualifying home passes to descendants and the estate stays below the taper thresholds.
To see how the bands stack against your own numbers, try the
Inheritance Tax Calculator
Estimate Inheritance Tax liability on an estate with our UK IHT calculator.
Open Inheritance Tax calculatorThe 100% cap and multiple marriages
A common misconception is that someone widowed twice can claim three nil-rate bands. They cannot. The maximum uplift to any single estate is 100% of one band - so your own band plus one transferred band, and no more. The same 100% cap applies separately to the residence nil-rate band.
If a survivor has had more than one spouse or civil partner die, the personal representatives can pick which unused bands to claim, but the total transferred can never exceed one full band of each type.
Claiming it - this is not automatic
The transferable nil-rate band is not applied by default. The personal representatives of the second estate must claim it, normally within two years of the end of the month in which the second death occurs. The claim is made on form IHT402, submitted with the main IHT return.
To support a claim, keep these documents from the first death:
- A copy of the will (or details of intestacy if there was no will)
- The grant of probate or confirmation
- The death certificate
- Any record of gifts or legacies that did use part of the first band
With the transferable band claimed, a couple's estate can shelter up to GBP 650,000 before any residence band, or up to GBP 1 million with it. Miss the claim, and the second estate may fall back on a single GBP 325,000 band - a difference that can cost six figures in tax.
Unmarried couples are treated very differently
The transfer is only available to spouses and civil partners. Cohabiting partners - no matter how long together - get neither the spouse exemption on the first death nor any transfer of the unused band. There is no "common law marriage" for IHT purposes.
For unmarried couples this makes planning far more important. Options worth discussing with a solicitor include making a will, considering a civil partnership or marriage, using life policies written in trust, and lifetime gifting. Do not assume the survivor will be protected automatically.
Charity and the reduced 40% rate
Leaving money to charity helps in two ways. Charitable gifts are themselves exempt from IHT, and if you leave at least 10% of the net estate (the value after deducting exemptions and the nil-rate bands) to charity, the rate on the rest of the estate drops from 40% to 36%.
The arithmetic of the 10% test interacts with the nil-rate bands and can be fiddly, so it is worth modelling carefully or taking advice before committing wording to a will.
How this fits the wider tax picture
IHT is only one part of an estate plan. During your lifetime, growth on investments may be subject to capital gains tax, currently 18% within the basic-rate band and 24% for higher-rate taxpayers, with a GBP 3,000 annual exempt amount. Income from an estate or from inherited assets is taxed under the normal income tax bands.
If you are restructuring savings to manage a future IHT bill, it can help to keep tax-efficient wrappers in view too - the ISA allowance is GBP 20,000 and the pension annual allowance is GBP 60,000. Pensions in particular have historically sat outside the estate for IHT, though the rules in this area change frequently, so confirm the current treatment before planning around it.
Common mistakes to avoid
- Assuming the transfer happens automatically. It must be claimed within the time limit.
- Discarding paperwork from the first death. Without it, the claim is harder to evidence.
- Believing multiple marriages multiply the bands. The cap is 100% of one band of each type.
- Forgetting the residence band conditions. No qualifying home to descendants means no GBP 175,000.
- Treating cohabitation like marriage. It is not, for IHT.
Bottom line
The transferable nil-rate band, combined with the residence nil-rate band, is the reason many married couples and civil partners can pass on up to GBP 1 million free of inheritance tax. It is generous but conditional, capped at 100% per band, and it must be actively claimed. Model your own estate first, then take professional advice on the wording of your wills.
Run the numbers for your situation with the
Inheritance Tax Calculator
Estimate Inheritance Tax liability on an estate with our UK IHT calculator.
Open Inheritance Tax calculatorFrequently asked questions
What is the transferable nil-rate band?
The transferable nil-rate band (TNRB) lets the unused percentage of one spouse's or civil partner's inheritance tax nil-rate band pass to the survivor on the second death. Because transfers between UK-domiciled spouses are exempt, the first death often uses none of the GBP 325,000 band. The survivor's estate can then claim up to 100% extra, giving a combined nil-rate band of up to GBP 650,000 before any residence nil-rate band is added.
How much can a married couple leave free of inheritance tax in 2026/27?
A married couple or civil partners can potentially leave up to GBP 1 million free of inheritance tax. That is two nil-rate bands of GBP 325,000 (GBP 650,000) plus two residence nil-rate bands of GBP 175,000 (GBP 350,000). The full GBP 1 million only applies where a qualifying main residence is left to direct descendants and the estate is below the taper thresholds. Use the inheritance tax calculator to model your own figures.
Is the transferable nil-rate band automatic?
No. It is not applied automatically. The personal representatives of the second estate must claim it, normally within two years of the end of the month in which the second death occurs. They use form IHT402 alongside the main IHT return. You should keep the will, grant and death certificate from the first death because HMRC may ask for evidence of how much of the first band was unused.
Can the transferable nil-rate band be more than 100%?
No. The maximum uplift is 100% of one full nil-rate band, even if the survivor had more than one previous spouse or civil partner who died. So the most any single estate can claim is its own band plus one extra band. The same 100% cap applies separately to the residence nil-rate band. You cannot stack three or four bands from multiple marriages.
Does the transferable nil-rate band apply to unmarried couples?
No. The transfer is only available between spouses and civil partners. Cohabiting partners, however long they have lived together, cannot transfer an unused nil-rate band and do not benefit from the spouse exemption on the first death. This is one of the biggest inheritance tax disadvantages of not marrying, and it often makes a will and other planning more important for unmarried couples.
What is the residence nil-rate band and is it also transferable?
The residence nil-rate band (RNRB) is an extra GBP 175,000 available when a main residence is left to direct descendants such as children or grandchildren. Like the standard band, any unused RNRB can transfer to a surviving spouse or civil partner, again capped at 100%. The RNRB tapers away for larger estates, so very high-value estates may lose some or all of it.
What happens to the nil-rate band if the first spouse died years ago?
The transferable nil-rate band can still be claimed even if the first death was decades ago, including before the rules began in October 2007. What matters is the percentage of the band that was unused on the first death, not the cash amount. That percentage is then applied to the band in force when the second person dies, currently GBP 325,000, so the value effectively uprates over time.
Does leaving money to charity change the inheritance tax rate?
Yes. The standard inheritance tax rate is 40% on the value of an estate above the available nil-rate bands. If you leave at least 10% of the net estate to charity, the rate on the remainder falls to 36%. Charitable gifts themselves are also exempt from inheritance tax. The interaction with the nil-rate bands can be complex, so model the figures carefully or take advice.
How do I work out my potential inheritance tax bill?
Start by valuing the whole estate, then subtract any spouse and charity exemptions, the available nil-rate band including any transferred amount, and the residence nil-rate band if a home passes to descendants. The remainder is taxed at 40%, or 36% with a qualifying charity gift. The inheritance tax calculator on CalcHub lets you test different combinations quickly before you speak to a solicitor.
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Related reading
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