Transferable NRB in one paragraph: when the first spouse or civil partner dies, the unused portion of their nil-rate band (£325,000) and residence nil-rate band (£175,000) can be claimed by the second spouse's estate on their death. Net effect for a couple where the first death involves a full spouse-to-spouse transfer: the survivor's estate has up to £650,000 of NRB + £350,000 of RNRB = £1m IHT-free if the home passes to direct descendants. The transfer is by percentage, not by frozen pound amount.
How the transfer works
On the first death:
- Calculate the value of the first spouse's estate.
- Identify gifts and bequests that use the nil-rate band (bequests to non-spouse beneficiaries).
- Calculate the percentage of NRB unused (could be 0% if the entire NRB was consumed; 100% if everything passed to the surviving spouse).
On the second death:
- The percentage of unused NRB from the first death is applied to the current NRB threshold — so if the NRB has been increased since the first death (it hasn't since 2009 but conceptually could), the transfer scales up.
- The second spouse's estate uses their own NRB plus the transferred percentage.
- Maximum: 100% transferred NRB, giving the surviving spouse's estate effectively 200% of the current NRB.
Same mechanism applies to the RNRB (£175,000) separately.
Worked example 1: simple spouse-everything-to-spouse
Mr A dies in 2010 with an estate of £400,000. Everything passes to his wife under spouse exemption. Used NRB on first death: £0 (spouse exemption doesn't use the NRB). Percentage unused: 100%.
Mrs A dies in 2026/27 with an estate of £900,000.
- Her own NRB: £325,000
- Transferred NRB: 100% × £325,000 = £325,000
- Total NRB available: £650,000
- If the home (worth £400,000) passes to children: RNRB £175,000 + transferred RNRB £175,000 = £350,000 (only £350,000 of RNRB is usable; the cap is the home value)
- Total tax-free: £650,000 + £350,000 = £1,000,000
- Estate £900,000 < £1,000,000 = zero IHT
Worked example 2: partial use on first death
Mr B dies in 2015 with an estate of £450,000. He leaves £200,000 to his son and £250,000 to his wife. The £200,000 to son uses NRB. Used NRB on first death: £200,000. NRB at that time was £325,000. Percentage unused: (325,000 − 200,000) / 325,000 = 38.5%.
Mrs B dies in 2026/27 with an estate of £700,000.
- Her own NRB: £325,000
- Transferred NRB: 38.5% × £325,000 = £125,125
- Total NRB: £450,125
- Plus £175,000 RNRB + £175,000 transferred RNRB (assuming home passes to children) = £350,000
- Total tax-free: £800,125
- Estate £700,000 < £800,125 = zero IHT
The RNRB transfer (less well known)
The RNRB became transferable from 6 April 2017, but unlike the NRB which is transferable for deaths going back decades, the RNRB transfer is unusual:
- The first spouse may have died before the RNRB existed (i.e., before April 2017). The transfer still applies — you don't lose RNRB transfer rights because the first spouse predeceased the policy.
- The first spouse's estate is treated as having had a full RNRB (£175,000) available, and the percentage unused is calculated against that.
- So even if Mr A died in 1995 leaving everything to his wife, his "unused 100% RNRB" transfers to her estate today.
This is one of the most-missed reliefs on second-death estates. Always check the first-death estate's potential transferable RNRB.
The RNRB taper above £2m
Above a total estate of £2m, the RNRB tapers at £1 of relief lost per £2 of estate above £2m. Fully tapered away at £2.7m estate (the RNRB is gone above that level).
The transferred RNRB is also subject to the taper. For estates over £2.35m, the entire £350,000 (own + transferred RNRB) is fully tapered to zero.
For high-value estates, the cliff edge around £2m matters enormously — reducing the estate to £2m or below (e.g., through lifetime gifts) preserves both RNRBs intact.
How to claim on second death
- Executor of the second-dying spouse uses HMRC form IHT402 (Transferable NRB) and IHT436 (Transferable RNRB).
- Provides evidence of the first death and the unused percentage. Required documentation: copy of the deceased first spouse's death certificate, the original will or intestacy details, the executors' final account showing what was distributed and to whom, marriage/civil partnership certificate.
- The 2-year time limit for claiming starts at the end of the month in which the second spouse dies.
- HMRC may request further evidence; in complex estates, the calculation needs careful documentation.
If the second-dying spouse doesn't claim, the transferable amount is lost permanently.
Multiple marriages
If you've been widowed more than once, you can potentially claim transferred NRB from each previous spouse who died before you — but capped at 100% of the current NRB combined.
Worked example: Mrs C is widowed twice. First husband died in 1990 leaving everything to her (100% unused NRB). Second husband died in 2020 leaving everything to her (100% unused NRB). On Mrs C's death:
- Her own NRB: £325,000
- Transferable NRB from first husband: 100% but capped at £325,000
- Transferable NRB from second husband: would be 100% but cap is total 100% transferred = £325,000 already exhausted
- Total NRB available: £650,000
So Mrs C cannot stack to 300% of NRB — only to 200% (her own + one transferred). The cap is the limit.
Common transferable NRB mistakes
- Not claiming the RNRB transfer because first spouse died pre-2017. The transfer still applies even though the RNRB didn't exist when the first spouse died.
- Confusing percentage with pound amount. If first spouse used £200,000 of a £325,000 NRB (38% unused), the survivor doesn't get "£125,000" frozen — they get 38% of the current NRB.
- Missing the 2-year claim window. Transfer must be claimed within 2 years of the end of the second-dying spouse's death month.
- Forgetting to consider RNRB taper above £2m. The whole "£1m couple's allowance" assumes the home passes to direct descendants AND estate is below £2m. Above £2m, RNRB tapers.
- Assuming gift exemptions transfer. Only NRB and RNRB transfer. The £3,000 annual exemption, gifts-out-of-income exemption, etc. do not.
- Treating divorce or non-marriage as exempt transfer eligible. Spouse exemption (and therefore NRB transfer) only applies to legal spouses and civil partners — not cohabiting couples or engaged couples.
Sources
Related content
How UK Tax Drag holds itself to account
Every page is reviewed against the editorial standards, written from primary sources, sourced openly, and corrected publicly. No affiliate revenue. No sponsored content. No paid placements.