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The Transferable Nil Rate Band for Inheritance Tax

The current nil rate band for inheritance tax - below which an estate will not pay inheritance tax on death - is currently £312,000

Last year the Chancellor introduced an additional relief for married couples and civil partners only, enabling a claim to be made for a transfer of a proportion of any nil rate band unused on a first spouse's death to be added to the nil rate available at the second death when this takes place after 9 th October 2007.

The amount transferred is the 'unused proportion' - so if a husband dies leaving his entire estate to his wife, the 'unused proportion' can be 100% - available at the rate applicable at the date of the second death .

The claim can be made whatever the date of death of the first spouse, and irrespective of the value of the assets in that estate.

However, the Revenue require production of a number of documents and information about both spouses, which is not always readily available. Gill Scott recommends that married couples ensure that they retain all the relevant papers and that on the first death the documents be assembled into a pack which can be retained in safe keeping until required by the survivor's executors.

There are of course a number of conditions attached and time limits for claims.

If you would like further information, contact Gill Scott on 020 8300 9321 or email gscott@wmk-law.com, alternatively Contact Us.

This article is intended for general interest, it is not intended to constitute legal advice or to be a definitive analysis of the law.  Readers should seek legal advice on the issues raised before taking any action.