£325,000 each, and a transfer worth today's money rather than yesterday's
The nil rate band is the slice of an estate charged at 0% inheritance tax. It is £325,000, it applies to every estate whoever inherits, and it has not moved since 6 April 2009. What most families miss is how generous the spousal transfer is once you understand its mechanism. If your husband died in 1996, when the band was £200,000, and left everything to you, your estate does not get £200,000 added to it. It gets £325,000, because what transfers is the unused percentage of his band, applied to the band in force when you die.
That design feature is worth £125,000 of threshold in the example above. The second point is sharper still: none of it happens by itself. The transfer is a formal claim with a deadline, and estates lose it. This is general information rather than legal or financial advice, and the figures were checked against GOV.UK and HMRC guidance on 3 August 2026. To put your own numbers against the allowances, our IHT threshold calculator assembles the stack in a couple of minutes.
What the band is, and how long it stays at £325,000
Inheritance tax is charged at 40% (36% where at least 10% of the baseline amount passes to charity) on the value of an estate above its available allowances. The nil rate band is the first and most universal of those. It is not means tested, it does not depend on who inherits, and it does not shrink as an estate grows. HMRC's Inheritance Tax thresholds table shows a single row covering the whole modern period: 6 April 2009 to 5 April 2031, £325,000.
That end date changed recently and much published material has not caught up: the freeze previously ran to April 2030. The measure published on 26 November 2025, Inheritance Tax: thresholds, "fixes the IHT thresholds at their current levels for one further tax year in 2030 to 2031", covering the nil rate band at £325,000, the residence nil rate band at £175,000 and the £2 million taper threshold. Budget 2025 put it plainly: the nil rate bands "will stay fixed at these levels for a further year until 5 April 2031". Twenty two years at one figure, against two decades of asset price growth, is why more estates become taxable each year.
Because the band is personal rather than per estate, chargeable gifts made in the 7 years before death are set against it before the estate is, as our guide to the 7 year rule explains. The full set of rates, reliefs and exemptions sits on our companion page, inheritance tax rates and allowances explained.
The transfer is a percentage, not a cash sum
This is the heart of the topic. Transferable nil rate band was introduced by the Finance Act 2008 and sits at IHTA84 sections 8A to 8C. HMRC's Inheritance Tax Manual at IHTM43001 describes the effect: "when a surviving spouse or civil partner dies, the nil rate band in place at their death will be increased by the proportion of the nil rate band that was not used on the earlier death of their spouse or civil partner".
The arithmetic is set out at IHTM43020, where the amount available to transfer "is expressed as percentage being E ÷ NRBMD × 100". E is the unused part of the band at the first death and NRBMD is the nil rate band maximum at that first death. HMRC's own example runs it: E of £150,000 against a band of £250,000 gives 60%, and 60% of the survivor Linda's own band of £300,000 adds £180,000, taking her threshold to £480,000. Note what the percentage is applied to. Not the old band. The current one.
Set against the historic figures, the effect is considerable. Each row assumes the first spouse left everything to the survivor, so 100% of the band was unused:
| Date of first death | Nil rate band then | Percentage unused | Added to the survivor's 2026/27 estate |
|---|---|---|---|
| 6 April 1990 to 5 April 1991 | £128,000 | 100% | £325,000 |
| 10 March 1992 to 5 April 1995 | £150,000 | 100% | £325,000 |
| 6 April 1996 to 5 April 1997 | £200,000 | 100% | £325,000 |
| 6 April 2002 to 5 April 2003 | £250,000 | 100% | £325,000 |
Three conditions frame it. The survivor must have died on or after 9 October 2007, the date the rule took effect. For married couples the first death "can have occurred at any time before or after that date", and IHTM43001 confirms the relief applies "where the first death occurred under Inheritance Tax, Capital Transfer Tax or Estate Duty"; for civil partners it must be on or after 5 December 2005. And where someone has been widowed more than once, IHTM43032 caps the uplift at "a maximum of 100% of the nil rate band at the death of the surviving spouse or civil partner". Two late spouses do not produce a £975,000 threshold.
How a will can spend the band before it ever transfers
The double allowance assumption fails where the first death used the band rather than wasting it. The classic cause is a will drafted before October 2007, when there was no transfer and the only way to use both bands was to give one away on the first death. IHTM43001 warns that spouses "may leave a legacy in their Will that is equal to the nil rate band to chargeable beneficiaries or to a trust", and that such clauses need reading carefully.
Two versions of the same family. Farhan and Yasmin married in 1988, and Farhan died in November 2003, when the band was £255,000.
- Version one. Farhan's will left everything to Yasmin. Spouse exemption covered the lot, so nothing was chargeable, none of his band was used, and 100% transfers. Yasmin dies in 2026 with £325,000 of her own band plus £325,000 transferred: a threshold of £650,000 before any residence allowance.
- Version two. Farhan's will put a nil rate band discretionary trust of £153,000 in place for the children, with the residue to Yasmin. E is £255,000 minus £153,000, which is £102,000. Divide by £255,000 and multiply by 100 and you get 40%. Yasmin's threshold is £325,000 plus 40% of £325,000, which is £130,000, so £455,000. The family that assumed £650,000 is £195,000 short, and at 40% that is £78,000 of unplanned tax.
Nothing went wrong in version two. The trust did its job under the rules of the day. The error is only in the expectation twenty three years later. There is also a helpful wrinkle: IHTM43016 records that these trusts were standard planning for many years, that "in many cases, the only asset in the trust was a half share of the matrimonial home", and that "it is possible that the trust was never properly constituted". Where it can be shown the trust was never actually set up, so full spouse exemption applied instead, the whole band remains available for transfer. That is a question of documented fact, and one to put to a solicitor.
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Claiming it: form IHT402, and the deadline that closes the door
The transfer does not attach itself to an estate. IHTM43006 is explicit that "the personal representatives must make a formal claim to transfer any unused nil rate band from the estate of the deceased's spouse or civil partner (IHTA84/S8B)". It is made on form IHT402, used "with form IHT400 to transfer to the deceased's estate any unused Inheritance Tax threshold (or 'nil rate band') from the previously deceased spouse or civil partner".
The time limit is the part to write down. Under IHTM43007 and IHTA84 section 8B(3)(a), the claim must be made within whichever ends later of:
- 24 months after the end of the month in which the second deceased died, and
- 3 months beginning with the date on which the personal representatives first acted as such.
HMRC's example makes the counting concrete: a survivor who died on 10 October 2014 gave a deadline of 31 October 2016. HMRC can accept a late claim at its discretion under section 8B(3)(b), and where personal representatives do not claim, IHTM43006 allows others liable for the tax, such as trustees of a settlement or the recipient of a gift, to claim on form IHT216 once the personal representatives' window has passed. Neither is a substitute for claiming on time.
Two habits protect the claim:
- Keep the first death paperwork permanently. The death certificate, the marriage or civil partnership certificate, the will, the grant and any inheritance tax account all support the later claim. File them with the survivor's will.
- Do not abandon the claim because records are missing. IHTM43011 accepts that where records do not exist, personal representatives "are entitled to complete their claim to the best of their ability and based on the information available". A death in 1979 is not a lost cause.
Keeping the nil rate band and the residence nil rate band apart
The two allowances are often merged into a single "threshold", which causes real errors because they behave differently:
| Nil rate band | Residence nil rate band | |
|---|---|---|
| Amount | £325,000 | Up to £175,000 |
| Who qualifies | Every estate, whoever inherits | Only where a qualifying home passes to direct descendants |
| Reduces with estate size | No | Yes, by £1 for every £2 above £2,000,000 |
| Transfer claim form | IHT402 | IHT436 |
Because they are separate, the transferred percentages can differ: a first death might leave 100% of one band and 0% of the other. GOV.UK's guidance on transferring the threshold confirms that "as the residence nil rate band and basic Inheritance Tax threshold are not linked, the percentages transferred can be different". The residence side, including the taper and the direct descendant test, is covered in our guide to the married couples' threshold and the residence nil rate band, and the wider system sits on our inheritance tax pillar guide.
Where this leaves you
The band is fixed and predictable until 5 April 2031. The variable is the transfer, and it turns on facts that are already settled: what a will said on a first death that may have happened decades ago, and whether anyone claims within two years of the second. Both are knowable in advance, which is what makes checking early worthwhile here. Start with the arithmetic: the IHT threshold calculator shows what your available bands add up to, and our walkthrough of how the threshold calculator works explains what it models. Then find the paperwork from any first death in the family, because that is where the percentage is decided.
If an older will contains a nil rate band trust, if the first death was long ago and the records are patchy, or if the two year window is already running, bring in a probate or estate planning solicitor. Reconstructing a first estate and evidencing the unused percentage is work worth paying for once, and we can put you in touch with someone who does it.