Transferring the Nil Rate Band Between Spouses: Complete Guide

How does the nil-rate band transfer between spouses for inheritance tax?

1When a spouse or civil partner dies without using all of their nil-rate band (NRB), the unused percentage transfers to the surviving spouse and can be claimed on the second death.
2The NRB is £325,000 per person in 2025/26, frozen until April 2030. A couple can therefore pass up to £650,000 free of IHT if both NRBs are fully available.
3The residence nil-rate band (RNRB) of up to £175,000 per person is also transferable, giving couples a potential combined threshold of £1,000,000.
4Transferability applies regardless of when the first spouse died — even if it was before 2007 when transferability was introduced, you can still claim.
5The unused NRB is claimed by the executors of the second estate — it is not automatic. Executors must claim it on form IHT402.

Married couples and civil partners can transfer unused nil-rate band between each other on death. If the first spouse dies leaving everything to the surviving spouse (using the spouse exemption), their full NRB is unused and transfers to the survivor — potentially doubling the IHT-free threshold on the second death.

This guide covers transferable NRB. For the residence nil-rate band specifically, see our guide to the RNRB: eligibility, downsizing, and the taper.

How the Transferable NRB Works

Introduced in October 2007, the transferable nil-rate band allows a surviving spouse or civil partner to claim the unused proportion of their late spouse's NRB on their own death. It works as follows:

On the first death, the executors note what proportion of the deceased's NRB was unused (0% to 100%)
That unused proportion is "banked" and can be claimed by the surviving spouse's estate on the second death
The claim increases the second estate's effective NRB by the transferred percentage

Crucially, the transfer is expressed as a percentage, not a fixed amount. It is applied to the NRB at the time of the second death. Since the NRB is currently frozen at £325,000 until 2030, a 100% transfer is worth £325,000 in additional threshold.

Example: Full NRB Transfer

Scenario: Spouse leaves everything to survivor

Husband dies in 2020, estate £600,000, leaves everything to wife
Spouse exemption applies: no IHT due
Husband's NRB used: £0 (entire estate passed to spouse, exempt)
Unused NRB percentage: 100%
Wife dies in 2026, estate £900,000 (house, savings, investments)
Wife's own NRB: £325,000
Transferred NRB from husband: 100% × £325,000 = £325,000
Total NRB available: £650,000
IHT: (£900,000 − £650,000) × 40% = £100,000

Without the transfer, IHT would have been (£900k − £325k) × 40% = £230,000.

Example: Partial NRB Transfer

Scenario: Spouse leaves some assets to children

Wife dies in 2022, NRB at that time: £325,000
She leaves £100,000 to her children, rest to husband
NRB used: £100,000 (the bequest to children absorbs NRB)
Unused NRB percentage: (£225,000 / £325,000) = 69.23%
Husband dies in 2026, estate £800,000
Husband's own NRB: £325,000
Transferred NRB: 69.23% × £325,000 = £225,000
Total NRB: £550,000. IHT: (£800k − £550k) × 40% = £100,000

The Residence Nil-Rate Band (RNRB) Is Also Transferable

Since 2017, the RNRB (currently £175,000) is also transferable between spouses on the same basis. If the first spouse dies without using their RNRB (for example, because they left the home to the surviving spouse rather than to children, or because they died before the RNRB was introduced), the unused RNRB transfers to the second estate.

Combined with the transferred NRB, a couple can potentially shelter £1,000,000 from IHT on the second death:

Surviving spouse's own NRB: £325,000
Transferred NRB from first spouse: £325,000
Surviving spouse's own RNRB: £175,000
Transferred RNRB from first spouse: £175,000
Total: £1,000,000

The RNRB conditions must be met — in particular, a qualifying residential property must pass to direct descendants (children, grandchildren, etc.). See our full guide to the RNRB for the eligibility requirements, downsizing addition, and taper for estates above £2m.

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Claiming the Transferred NRB: The Process

The transferred NRB is not automatic — it must be claimed by the executors of the second estate. The claim is made on form IHT402 ("Claim to Transfer Unused Nil Rate Band"), submitted with the IHT400 when applying for probate.

Executors will need to produce evidence of:

The first spouse's death certificate
The first spouse's will (or intestacy evidence)
The first spouse's IHT form (IHT400 or IHT205 from the first death), or evidence of what the estate was worth and how it was distributed

For deaths that occurred many decades ago, this can be challenging. HMRC will accept reasonable alternative evidence if original documents have been lost.

What If the First Spouse Died Before 2007?

The transferable NRB was introduced in October 2007, but it applies retrospectively. If the first spouse died before 2007 — even decades ago — the unused NRB from their estate can still be claimed by the second estate. The transfer percentage is calculated based on what portion was unused at the time of the first death, applied to the NRB at the time of the second death.

This is particularly valuable for widows and widowers who lost their spouse many years ago and may not have realised they can claim the transferred NRB.

Will Structure to Maximise the Transfer

To make the most of the transferable NRB, wills should be structured carefully. The key point is that the maximum transfer (100%) occurs when the first spouse leaves everything to the survivor using the spouse exemption — their NRB is completely unused.

However, this is not always optimal. If the second estate will be very large, it may sometimes be preferable to use some of the first spouse's NRB on assets passing to children at the first death — rather than accumulating the full estate in the survivor's hands. A tax specialist can model the most efficient structure for your specific circumstances.

What to avoid is a will that accidentally uses the NRB inefficiently — for example, by making specific bequests to non-spouse beneficiaries that consume the NRB without thought. If you or your spouse has not updated your will recently, check that it is still optimal given current thresholds and the size of the estate.

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