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Tax Tip

Guidance on Transfer of unused Nil Rate Band

The ability to transfer nil rate band (TNRB) between the estates of husband and wife or civil partners was introduced in the Finance Act 2008.

The effect of TNRB is that when a surviving spouse or civil partner dies, the nil rate band available at their death will be increased by the proportion of the nil rate band that was not used on the death of their spouse or civil partner.

TNRB is available where the death of the surviving spouse or civil partner occurs on or after 9th October 2007. For spouses, the first death can have occurred at any time before or after that date and the relief therefore applies where the first death occurred under IHT, Capital Transfer Tax or Estate Duty and there was unused nil rate band.

For civil partnerships the first death must have occurred on or after 5 December 2005, the date the Civil Partnership Act became law in the United Kingdom.

While the benefit of the unused nil rate band accrues to the estate of the surviving spouse or civil partner, there is no requirement for assets to have passed to the spouse or civil partner on the first death. The legislation refers to unused nil rate band rather than property passing to the surviving spouse or civil partner. So property that passed as an exempt or relievable transfer (for example, a transfer to charity or for national purposes or property that attracted business or agricultural relief) will not use up the nil rate band. And where the value of an estate is below the IHT nil rate band at the date of the first death, the full amount of the nil rate band that is not used is available for transfer.


On the first death the entire estate valued at £150,000 was left to the deceased’s son. If the nil rate band was £325,000, this would result in £175,000 of the nil rate band being available to transfer to the surviving spouse or civil partner.

Because it is the unused nil rate band that is transferred, there can be no TNRB at the second estate if IHT was paid on any part of the estate on the death of first spouse or civil partner. Estate here has the normal meaning for IHT and includes assets held in trust, gifts with reservation and joint property passing by survivorship. Gifts that cumulate with the death estate will also use up the available nil rate band at the first death.

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