If the person who has died was pre-deceased by their spouse or civil partner it may be possible for them to claim what is known as ‘Transfer of Unused Nil Rate Band’. This means that any part of their partners unused nil rated band (the amount that can be left tax-free), that was not used when the first spouse or civil partner died, can be transferred to the surviving spouse or civil partner for use by their estate, on their death, as long as their spouse or civil partner, who died first, died on or after 13 November 1974 (5 December 2005 for Civil Partners).
For deaths prior to January 1 2022, to use this exemption you must submit your application no later than 24 months after the end of the month in which the deceased died. For example, if the deceased died on 10 October 2019, you would need to send this form with form IHT205 by 31 October 2021.
Scenario 1: when the spouse or civil partner died, they did not use up any of the nil rate band available, so that whole of the nil rate band is available for their spouse or civil partner to use. If the first spouse or civil partner passed all of their estate to their partner then the nil rate band is available to transfer – i.e. the amount which they were entitled to transfer tax free can be used by their spouse / civil partner in addition to their own allowance. For example, if Tom died 5 years ago and Rebecca has recently died, this would mean that Rebecca has a tax free allowance of £650,000 – her own £325,000 and the £325,000 unused by Tom when he pre-deceased her. In this scenario, YouCanDoProbate will automatically apply this exemption to the estate and will generate an IHT217 to submit along with the other forms.
Scenario 2: The pre-deceased spouse or civil partner left assets to anyone other than the surviving spouse or civil partner (excluding a charity). In this scenario, part of the nil rate would have been used up. The remaining amount will still be available. For example, if Tom had left £100,000 to his daughter and then left everything else to Rebecca, her total tax free amount will be £550,000 – her own £325,000 and the £225,000 that Tom did not use. In this scenario you are not able to submit an IHT205, but will now need to complete an Inheritance Tax Account from IHT400, which is a more detailed form, and requires different information. You might consider legal advice to help you continue to apply for Probate.
Please Note: If this should happen to you, as long as you have not attempted to generate the Probate or Inheritance Tax forms, and the terms of our Refund Policy have not been breached, you will be able to take advantage of our money back guarantee.
To determine whether the Transfer of Unused Nil Rate Band exemption can be used, the following must apply to the spouse or civil partner who died first. #
Died on or after 13 November 1974 (5 December 2005 for Civil Partners).
Were domiciled (had their permanent home) in the UK at the date of death.
Their estate was wholly exempt from Inheritance Tax? (No inheritance tax due/paid on their estate).
All jointly owned assets passed after their death to the spouse or civil partner who has died now.
They did not make any Gifts out of income totalling more than £3,000 per Tax Year, or other Transfers during the 7 years before they died that were not exempt from Inheritance Tax (For more information on Gifts, please read What are gifts made in the 7 years prior to death).
They did not have either agricultural and / or business relief deducted either from their estate or from any gifts they made during their lifetime (Agricultural relief or business relief is a relief available whereby any such assets may be exempt from Inheritance Tax).
They did not make any gifts with reservation of benefit other than to the spouse or civil partner who has died now (A gift with reservation is when a gift is given but full title is not passed to that person. For example, if you gift a property to someone but continue to still live in in rent free then that is an example of a gift with reservation).
They did not benefit from a Trust during their lifetime.
If any of the does not apply, you are not able to submit an IHT205, but will now need to complete an Inheritance Tax Account from IHT400, which is a more detailed form, and requires different information. You might consider legal advice to help you continue to apply for Probate.
Please Note: If this should happen to you, as long as you have not attempted to generate the Probate or Inheritance Tax forms, and the terms of our Refund Policy have not been breached, you will be able to take advantage of our money back guarantee.