Glossary · UK
What is Transferable Nil-Rate Band?
A rule letting a deceased person's unused inheritance tax nil-rate band transfer to their surviving spouse or civil partner, potentially doubling it.
Full Definition
The transferable nil-rate band lets the unused percentage of one spouse's or civil partner's inheritance tax nil-rate band pass to the survivor when they die. The standard nil-rate band for 2026/27 is £325,000, taxed at 0% before the 40% rate applies (36% if at least 10% of the net estate goes to charity). If the first to die leaves everything to their partner, it is exempt and 100% of their band is unused, so the survivor's estate can claim two full bands totalling £650,000. The transfer is expressed as a percentage, not a fixed sum, so it reflects the band in force at the second death. The residence nil-rate band (£175,000, tapered by £1 for every £2 of estate above £2,000,000) is separately transferable, potentially adding up to £350,000 and giving a combined £1,000,000 for a couple passing a qualifying home to direct descendants. The personal representatives must claim the transfer within two years of the second death using form IHT402. Inheritance tax operates UK-wide, so the same rules apply in England, Wales, Scotland and Northern Ireland.