Inheritance Tax Act 1984 section 8A

Transfer of unused nil-rate band between spouses and civil partners

Section 8A allows any unused portion of a deceased person's inheritance tax nil-rate band to be transferred to their surviving spouse or civil partner, increasing the nil-rate band available when the survivor dies.

• When a person dies leaving a spouse or civil partner, any nil-rate band they did not use can be transferred to the survivor
• The unused nil-rate band is calculated as the difference between the maximum amount that could have been charged at 0% (M) and the value actually transferred on death (VT)
• The survivor's nil-rate band is increased by a percentage equal to the unused portion divided by the nil-rate band maximum at the time of the first death, multiplied by 100
• The total increase to the survivor's nil-rate band is capped at 100% of the nil-rate band maximum at the time of the survivor's death, even if the survivor had more than one deceased spouse or civil partner with unused nil-rate band