Can the Inheritance Tax Allowance Be Transferred? How to Maximise Your Family’s Tax-Free Legacy

Belgravia Capital
May 31
3 min read

One of the most powerful - yet underused - inheritance tax (IHT) strategies for married couples and civil partners is the ability to transfer unused inheritance tax allowances.

At Belgravia Capital Wealth Management, we’re often asked:

“Can my inheritance tax allowance be transferred?”

The answer is: Yes - and it can double the amount your family can pass on tax-free.

In this article, we explain how the transferable inheritance tax allowance works, how to claim it, and how it can help your family avoid unnecessary IHT.

What Is the Inheritance Tax Allowance?

The inheritance tax allowance, also called the nil-rate band (NRB), is the amount you can pass on tax-free when you die. As of 2025, it’s set at:

£325,000 per person
Plus up to £175,000 residence nil-rate band (RNRB) if you leave your home to a direct descendant

This gives a potential total allowance of £500,000 per person, or £1 million per couple - but only if allowances are correctly used and claimed.

Can You Transfer the Inheritance Tax Allowance?

Yes, married couples and civil partners can transfer any unused portion of their partner’s inheritance tax allowance.

This means when the first person dies, if they don’t use all (or any) of their IHT allowance, the survivor can inherit the unused portion.

Even if the first spouse died many years ago, the transfer can still be claimed when the second dies - provided certain documents are available.

How Does the Transfer Work?

Let’s break it down:

Example:

John dies in 2010 and leaves everything to his wife, Sarah.
No IHT is due because transfers between spouses are tax-free.
As John used none of his £325,000 NRB, 100% is transferable.
When Sarah dies in 2025, her estate can benefit from:
- Her own £325,000 NRB
- Plus John’s unused 100% = £650,000 tax-free
- Add residence nil-rate bands if applicable, and the tax-free total can reach £1 million

This strategy can result in zero inheritance tax on substantial estates.

What About the Residence Nil-Rate Band (RNRB)?

Yes - the residence nil-rate band is also transferable between spouses or civil partners, under the same principles.

So if one partner dies without using their £175,000 RNRB (e.g. no home passed to descendants), the other partner can still claim it later.

Combined, a couple could pass on:

£325,000 x 2 = £650,000 (NRB)
£175,000 x 2 = £350,000 (RNRB)
Total: £1 million tax-free

But be aware - the RNRB is only available if the home (or a previous home) is left to a direct descendant.

How Do You Claim the Transferred Allowance?

When the second partner dies, the executor or administrator must claim the transferable allowances.

They must submit:

IHT402 form (for transferable nil-rate band)
IHT436 form (for transferable RNRB, if applicable)
Original death certificate of the first spouse
Marriage or civil partnership certificate
Details of the first spouse’s estate and will (even if no IHT was due)

These forms are submitted alongside the IHT400 return when applying for probate.

Common Mistakes to Avoid when Inheritance Tax Planning

Not keeping records - If the first spouse died years ago, find and store:
- Death certificate
- Marriage certificate
- Will or estate details
Failing to claim on time - Transfer claims must be made when applying for probate of the second estate.
Assuming you qualify - Only married or civil partners qualify for the transfer; cohabiting couples do not.
Not planning ahead - With property price inflation, many estates now exceed the IHT threshold — planning helps avoid missed allowances.

Can You Still Claim if the First Partner Died Many Years Ago?

Yes - as long as:

You were married or in a civil partnership at the time of death
The second death has now occurred (it’s claimed then, not earlier)
You can provide the necessary documentation

There is no time limit between deaths for this rule to apply.

How Belgravia Capital Wealth Management Can Help with Transferring Inheritance Tax

At Belgravia Capital, we work with families across generations to preserve wealth and minimise inheritance tax.

We can:

Assess IHT exposure for both partners
Ensure all available allowances are claimed
Coordinate with solicitors and executors to handle IHT paperwork
Advise on lifetime planning to pass on wealth tax-efficiently
Make sure your wills are correct and up to date, and draft new ones if necessary

We take the stress out of inheritance tax - so you can focus on what matters most: your family’s future.

Conclusion: Can Inheritance Tax Allowance Be Transferred?

Yes - and it’s one of the most effective ways to reduce or eliminate inheritance tax.

By claiming the unused nil-rate and residence nil-rate bands of a deceased spouse or partner, families can potentially shield up to £1 million of their estate from tax.

Planning for this now can save your loved ones tens or even hundreds of thousands of pounds.

Want help ensuring you claim everything you’re entitled to?