Transferable Nil Rate Band on Second Death: Claiming the Full £650,000
When the first spouse or civil partner dies leaving everything to the survivor, none of their £325,000 nil rate band is usually used — so up to 100% of it can be transferred to the survivor's estate. On the second death the executors claim it on form IHT402, lifting the total tax-free band from £325,000 to £650,000. The crucial trick: it is a percentage that transfers, not a cash sum, so it automatically uprates to whatever the band is at the second death.
What the transferable nil rate band actually is
Every individual has a nil rate band (NRB) — the slice of an estate charged Inheritance Tax (IHT) at 0% rather than the standard 40%. The standard NRB is £325,000 and has been frozen at that level since 6 April 2009; it is currently set to stay frozen until 5 April 2031 (GOV.UK: IHT thresholds).
Gifts between spouses and civil partners are normally exempt from IHT. So when the first person dies and leaves their whole estate to their husband, wife or civil partner, the spouse exemption mops up the lot — and the deceased's £325,000 nil rate band sits completely unused. Before October 2007 that unused band was simply lost. Since 9 October 2007, the transferable nil rate band (TNRB) rules let the survivor's estate inherit it.
The personal representatives of the second person to die can claim the percentage of the nil rate band that was unused on the first death — up to a maximum of 100%. Add a full 100% transfer to the survivor's own band and the estate has two full nil rate bands: £325,000 + £325,000 = £650,000 at 0% IHT. Source: GOV.UK: Transferring an unused Inheritance Tax threshold.
Worked example: the full £650,000
Margaret and Roy. Roy dies first, in 2011, leaving his entire estate of £400,000 to Margaret. Because spouse-to-spouse transfers are exempt, none of Roy's £325,000 nil rate band is used. His unused percentage is therefore 100%.
Margaret dies in 2026 with an estate of £600,000. Her executors claim Roy's transfer on form IHT402. The maths runs like this:
- Margaret's own NRB: £325,000
- Transferred from Roy (100% of the band at Margaret's death): 100% × £325,000 = £325,000
- Total nil rate band available: £325,000 + £325,000 = £650,000
Result: Margaret's £600,000 estate sits entirely under the combined £650,000 band, so the IHT bill is £0. Without the claim, £600,000 − £325,000 = £275,000 would have been taxed at 40% — a bill of £110,000. The IHT402 claim saves the family the whole £110,000.
Why a percentage transfers — not a cash amount
This is the detail people most often get wrong. The rules do not bank the cash value of the band at the first death. Instead they record the percentage of the band that went unused, and apply that percentage to whatever the nil rate band is on the day the survivor dies.
In the example above, Roy died in 2011 when the band was already £325,000. But suppose he had died in 2007 when the band was £300,000, still leaving everything to Margaret. His unused percentage would still be 100% — and 100% applied to the £325,000 band in force at Margaret's 2026 death gives a £325,000 transfer, not £300,000. The percentage method means a surviving spouse's estate benefits from any future rise in the band, automatically, with no cap on the historic figures (GOV.UK).
Partial transfer: when some of the band was used on the first death
A 100% transfer is the easy case. More often, the first death used part of the nil rate band — for example a legacy to children, or a gift made within seven years of death that ate into the band. Then you transfer only the leftover percentage.
The official two-step calculation is:
- Find the unused percentage at the first death: divide the unused nil rate band by the band that was available when the first person died, then multiply by 100.
- Apply that percentage to the survivor's band: multiply the unused percentage by the nil rate band in force when the survivor dies.
James and Priya (partial transfer). James dies in 2014 when the nil rate band is £325,000. He leaves a £130,000 legacy to his children and the rest to Priya. The £130,000 legacy is not spouse-exempt, so it uses part of his band.
Step 1 — unused percentage at first death:
- Band available when James died: £325,000
- Amount used by the children's legacy: £130,000
- Unused band: £325,000 − £130,000 = £195,000
- Unused percentage: (£195,000 ÷ £325,000) × 100 = 60%
Step 2 — apply to Priya's death in 2026:
- Nil rate band when Priya dies: £325,000
- Transfer: 60% × £325,000 = £195,000
- Priya's total band: £325,000 (her own) + £195,000 (transferred) = £520,000
If Priya's estate is, say, £700,000, the taxable amount is £700,000 − £520,000 = £180,000, taxed at 40% = £72,000. Claiming the partial transfer still saved 60% of a band — £78,000 of tax — compared with not claiming at all.
The numbers side by side
| Scenario | Unused % at first death | Transferred amount | Survivor's total band |
|---|---|---|---|
| Everything left to spouse (Margaret & Roy) | 100% | £325,000 | £650,000 |
| £130,000 to children (James & Priya) | 60% | £195,000 | £520,000 |
| Whole band used on first death | 0% | £0 | £325,000 |
Figures use the standard nil rate band of £325,000 and the 40% IHT rate, both verified against GOV.UK for the 2025–26 tax year. They exclude the separate residence nil rate band (a further £175,000 per person where a home passes to direct descendants), which has its own transfer rules and is claimed on form IHT436.
How to claim it: form IHT402 and the first-death evidence
The transfer is not automatic. The personal representatives of the second estate must actively claim it on form IHT402, submitted together with form IHT400 (the full IHT account). HMRC last updated IHT402 on 6 April 2025 for the 2025–26 tax year (GOV.UK: IHT402).
Crucially, the evidence you need relates to the first death, often years or decades earlier. Pull these documents together before you start:
| Evidence from the first death | Why HMRC wants it |
|---|---|
| Death certificate of the first spouse / civil partner | Confirms who died, and when, fixing the band that applied |
| Marriage or civil partnership certificate | Proves the legal relationship that allows the transfer |
| The Will (and any deed of variation) | Shows what passed to the survivor versus to others |
| Grant of probate / confirmation, or the IHT forms filed | Evidences the value of the first estate and how much band was used |
IHT402 walks through these figures and asks you to work out the unused percentage. If the first death generated no IHT forms (very common where everything passed to the spouse), you reconstruct the position from the Will and the date of death — which is exactly why keeping the first set of papers matters.
The claim is normally made within two years of the end of the month in which the second death occurred. Even where there is no IHT to pay, claim the transfer if it lets the estate qualify as an "excepted estate" or reduces the tax — it is the executors' job to claim it, and missing it can needlessly cost the family tens of thousands. Check the current deadline and procedure on GOV.UK before filing.
- Up to 100% of an unused nil rate band transfers from the first death to the survivor — potentially £325,000 + £325,000 = £650,000 tax-free.
- A percentage transfers, not a cash sum, so the amount uprates to the band in force at the second death.
- Partial transfers: unused % = (unused band ÷ band at first death) × 100, then apply that % to the survivor's band.
- The transfer is not automatic — claim it on IHT402 alongside IHT400, usually within two years of the second death.
- Gather first-death evidence early: death certificate, marriage/civil partnership certificate, the Will, and the original grant or IHT forms.
Frequently asked questions
Can I transfer the nil rate band from more than one deceased spouse?
Yes, but the total transferred is capped at 100% of one nil rate band. If a person was widowed more than once, the survivor's estate can claim from each former spouse, but the combined transfer cannot exceed 100% — so the most you can ever reach is two full bands (the survivor's own plus one transferred), i.e. £650,000 at the current £325,000 band.
Does the transfer happen automatically when the second spouse dies?
No. The personal representatives must claim it by filing form IHT402 with the IHT400 account. If no one claims it, the estate is assessed on a single £325,000 band and the family could face an avoidable 40% tax charge on the difference.
What if everything was left to the surviving spouse on the first death?
Then none of the first band was used (spouse transfers are exempt), so 100% transfers. The survivor's estate gets the full second nil rate band on top of its own — £650,000 in total at today's rates — as in the Margaret and Roy example above.
Does the residence nil rate band transfer the same way?
The principle is similar — up to 100% of an unused residence nil rate band (currently £175,000 per person) can pass to a surviving spouse — but it is a separate allowance with extra conditions (a home must pass to direct descendants) and is claimed on form IHT436, not IHT402.
Is there a deadline to claim the transferable nil rate band?
Generally the claim must be made within two years of the end of the month of the second death (HMRC may accept a late claim in limited circumstances). Confirm the current deadline on the GOV.UK transfer-of-threshold guidance before filing, as time limits can change.
What if the first death was decades ago and we have no paperwork?
You can still claim, but you need to evidence the relationship and how much band was used. Order a replacement death certificate and marriage/civil partnership certificate, find the Will (probate copies are publicly searchable in England and Wales), and reconstruct the figures. HMRC expects reasonable evidence, so start the search early.
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