Inheritance Tax Nil Rate Band and the Surviving Spouse: What You Need to Know

Inheritance Tax is charged at 40% on the value of an estate above a threshold known as the nil rate band (NRB). What many bereaved families don't realise is that a surviving spouse can inherit the deceased's unused NRB — potentially doubling the amount shielded from tax when the surviving spouse later dies.

Understanding this now — while administering the first estate — is essential. Claiming the transferable NRB at the right time can save tens of thousands of pounds.

The 2026 Nil Rate Band

The standard nil rate band for 2026/27 remains at £325,000 — unchanged since 2009 and frozen until at least 2030.

This means the first £325,000 of a deceased person's estate is taxed at 0%. Everything above that threshold is taxed at 40%, unless:

• It passes to a surviving spouse or civil partner (completely exempt)
• It passes to a qualifying charity (completely exempt)
• The Residential Nil Rate Band (RNRB) applies

The Spousal Exemption: Nothing Paid on First Death

When assets pass from one spouse to another, no Inheritance Tax is due at all — regardless of the estate's size. The spousal exemption is unlimited provided:

• The couple were legally married or in a civil partnership
• The surviving spouse is domiciled in the UK

Cohabiting partners (unmarried and not in a civil partnership) do not benefit from the spousal exemption. Assets passing to a cohabiting partner are taxed above the deceased's nil rate band in the same way as assets passing to any other beneficiary.

The Transferable Nil Rate Band

Here is the crucial point for estate planning. When the first spouse dies and their entire estate passes to the surviving spouse (using the spousal exemption), the deceased spouse's nil rate band goes entirely unused. That unused NRB can be transferred to the surviving spouse's estate.

This means that when the surviving spouse dies, the estate can claim:

• Their own nil rate band of £325,000
• Plus the transferred unused NRB from the deceased spouse: up to £325,000
• Total: up to £650,000

The transferred NRB is applied as a percentage of the nil rate band at the time of the second death. So if the nil rate band rises in the future, the transferred percentage produces a higher absolute amount.

Example: The first spouse dies leaving everything to the surviving spouse. Their nil rate band is 100% unused. The surviving spouse dies in 2026/27. The estate claims £325,000 (own NRB) + £325,000 (100% of transferred NRB) = £650,000 IHT-free.

The Residential Nil Rate Band (RNRB)

In addition to the standard NRB, there is a Residential Nil Rate Band available when a qualifying residential property is left to direct descendants (children, grandchildren, stepchildren, etc.).

The RNRB rate for 2026/27 is £175,000 per person.

Like the NRB, a deceased spouse's unused RNRB can be transferred to the surviving spouse. This means a surviving spouse may also be entitled to claim:

• Their own RNRB: £175,000
• Transferred RNRB from the deceased spouse: up to £175,000
• Total RNRB: up to £350,000

Combined with the standard NRB transfers, the total IHT-free amount for a surviving spouse's estate can reach £1,000,000 (£650,000 NRB + £350,000 RNRB) — provided the estate includes a qualifying residential property left to direct descendants.

What Is an Excepted Estate?

An excepted estate is one where no Inheritance Tax is due and simplified reporting rules apply. An estate qualifies as excepted if:

• The gross estate is below £325,000 (the nil rate band), or
• The gross estate is below £650,000 and the entire excess above £325,000 passes to a surviving UK-domiciled spouse or civil partner, or
• The gross estate is below £3,000,000 and the entirety passes to a surviving spouse, civil partner, or qualifying charity

For deaths occurring on or after 1 January 2022, excepted estates no longer need to complete a paper IHT205 form. Instead, estate values are declared directly through the MyHMCTS online probate portal, or via the NIPF7 summary form if applying by post.

Non-excepted estates — those with IHT to pay, or those with foreign assets exceeding £100,000, or trust assets exceeding £250,000 — must submit the full IHT400 form to HMRC.

How to Claim the Transferred Nil Rate Band

The transferred NRB is not claimed automatically. The executor of the second estate must claim it from HMRC by submitting form IHT402 alongside the main estate documentation.

To support the IHT402 claim, you typically need:

• The first spouse's death certificate
• Evidence of the marriage or civil partnership
• Details of the first estate (a copy of the probate grant, if applicable, or evidence that no probate was required)
• Evidence of what IHT, if any, was paid on the first estate

HMRC then calculates the percentage of unused NRB from the first estate and applies it to the surviving spouse's estate.

Practical Timing Points

No deadline for claiming transferred NRB — you can claim it even decades after the first death. Families sometimes discover an unclaimed transferred NRB when dealing with the second estate long after the first spouse died.

IHT payment deadline — IHT on an estate is due six months after the end of the month in which the death occurred. Interest accrues on unpaid IHT after that date. You can pay before probate is granted by making a direct HMRC payment.

HMRC IHT400 processing time — if the estate is not excepted and requires an IHT400, allow around 20 working days for HMRC to issue the unique 10-digit clearance code required before HMCTS will process the probate application.

Scotland, Wales, and Northern Ireland

Inheritance Tax and the NRB operate identically across all four nations of the United Kingdom. The RNRB also applies uniformly. Devolved administrations have no powers over IHT — it is a reserved UK-wide tax.

The IHT threshold rules, transferable NRB claims, and the excepted estate test are covered step by step in the England Survivor Benefits Navigator — alongside the full picture of survivor benefits, pension inheritance, and estate administration for bereaved families in England.

See more England guides →