Syllabus A3. Inheritance Tax A3a. IHT arising on lifetime transfers and on death

A3a. Transfer of unused NRB between spouses

Syllabus A3a)

D2 The liabilities arising on the chargeable lifetime transfers and on the death of an individual

What if a spouse does not use their entire nil rate band?

This is how the other spouse benefits:

Any unused nil rate band on a person’s death can be transferred to their surviving spouse (or registered civil partner). 

The nil rate band will often not be fully used on the death of the first spouse because any assets left to the surviving spouse are exempt from IHT (see the following section on transfers to spouses).

A claim for the transfer of any unused nil rate band is made by the personal representatives who are looking after the estate of the second spouse to die.

The amount that can be claimed is based on the proportion of the nil rate band not used when the first spouse died.

Even though the first spouse may have died several years ago when the nil rate band was much lower, the amount that can be claimed on the death of the second spouse is calculated using the current limit of £325,000.


Nun died on 29 March 2019.

None of her husband’s nil rate band was used when he died on 5 May 2006.

When calculating the IHT on Nun’s estate a nil rate band of £650,000 (325,000 + 325,000)
can be used because a claim can be made to transfer 100% of her husband’s nil rate band.


Tthe nil rate band in 2006/07 was not £325,000 but it is the unused percentage that is
carried forward and not the amount of unused nil band. Therefore, Nun can use 100% of
the current value of the nil band as well as her own nil band.


Win died on 24 February 2019 leaving an estate valued at £800,000. Only 60% of his wife’s nil rate band was used when she died on 12 May 2007.

On 10 May 2014, Win had made a gift of £200,000 to his son. This figure is after deducting available exemptions.

The nil rate band for the tax year 2014/15 is £325,000

IHT liabilities are as follows:

Lifetime transfer – 10 May 2014

Potentially exempt transfer 200,000
No life tax on a PET

Additional liability arising on death – 10 May 2014

Potentially exempt transfer 200,000
Covered by the 2014/15 NRB

Death estate

Chargeable estate 800,000
IHT liability
255,000 at nil% (325,000 + (40% x 325,000) - 200,000) 0
545,000 at 40% 218,000

Win’s personal representatives can claim the wife’s unused nil rate band of £130,000 (325,000 x 40%).

The amount of nil rate band is therefore £455,000 (325,000 + 130,000), of which £200,000 is utilised by the PET made on 10 May 2014.