What is the transferable nil rate band?

When a spouse or civil partner dies leaving a surviving spouse or civil partner, and part or all of their nil rate band allowance is unused at that time, due to the majority of, or all of, the estate of the first spouse or civil partner passing tax free to their surviving spouse or civil partner either by life interest or absolutely, any unused percentage may be carried forward and added to the nil rate band allowance of the survivor.

Unfortunately, there may be a considerable period between the death of the first spouse or civil partner and the death of the survivor. This makes it more difficult to prove what if any nil rate band is available for transfer and demonstrates the importance of retaining all documentation relating to the estate of the first spouse or civil partner to die, as HMRC require such details in order to agree any claim made on the second death.

If you are a surviving spouse or civil partner and you do not hold specific documents relating to your late spouse or civil partner, your executors on your demise will have great difficulty in claiming this allowance. It is sensible to collect and keep safe such documentation for the future.

The claim for a transferable band is not automatic. Be prepared in advance. Ensure your Wills are up to date and there are not certain clauses in your current Wills which prevent the operation of the transferable nil rate band. In the event of uncertainty, always consult a professional to undertake a review of your current Wills.