How to Claim the Transferable Nil Rate Band Using IHT402 in the UK

Did you know that many families in the UK pay more inheritance tax (IHT) than they need to, simply because they fail to claim the transferable nil rate band? When a spouse or civil partner passes away, any unused portion of their nil rate band (NRB) can be transferred to the surviving partner — potentially doubling the IHT-free threshold from £325,000 to £650,000. That’s a potential saving of up to £130,000 in tax at the current 40% rate.

Claiming this allowance is done through the IHT402 form, which is submitted alongside the main IHT400 inheritance tax return. In this guide, we’ll walk you through exactly how the transferable nil rate band works, who can claim it, and how to complete and submit Form IHT402 correctly — so you can protect your family’s financial future and ensure more of your estate passes to your loved ones rather than to HMRC.

Key Takeaways

• The transferable nil rate band can double the IHT-free threshold for married couples and civil partners to £650,000.
• The claim is made using the IHT402 form, submitted alongside the IHT400 return to HMRC.
• The transfer works on a percentage basis — not a fixed amount — which is important if the NRB was different when the first spouse died.
• The claim must be made within two years of the end of the month in which the second spouse or civil partner died.
• Combined with the residence nil rate band (RNRB), a married couple can potentially pass on up to £1,000,000 free of IHT.

Understanding the Nil Rate Band in Inheritance Tax

The nil rate band is a fundamental concept in the UK’s inheritance tax system. It represents the portion of a person’s estate on which no inheritance tax is payable — effectively an IHT-free allowance. Inheritance tax planning revolves around understanding and making the most of this band, and it’s the single most important figure in any IHT calculation.

What is the Nil Rate Band?

The nil rate band (NRB) is the threshold below which an estate pays no inheritance tax. Everything above the NRB is taxed at 40% (or 36% if at least 10% of the net estate is left to charity). In practical terms, the NRB is the amount you can leave to your beneficiaries — children, friends, anyone other than your spouse or a charity — without them having to pay IHT on it.

The NRB applies per person, and it is set by the government. Crucially, it has been frozen at £325,000 since 6 April 2009 — over 16 years without any increase. Had it risen with inflation, it would be well over £450,000 today. This freeze, confirmed to continue until at least April 2031, is the primary reason why so many ordinary homeowners are now caught by IHT. With the average home in England now worth around £290,000, it doesn’t take much in savings, pensions, and life insurance to push an estate over the threshold. And from April 2027, inherited pensions will also become liable for IHT — pulling even more families into the net.

Current Nil Rate Band Thresholds

The current nil rate band threshold is £325,000 per individual. For married couples and civil partners, the unused portion of the first spouse’s NRB can be transferred to the surviving spouse, effectively doubling the threshold to £650,000. This is the transferable nil rate band — and it’s what Form IHT402 is designed to claim.

• The standard nil rate band is £325,000 per person — frozen since 6 April 2009 and confirmed frozen until at least April 2031.
• For married couples and civil partners, the combined threshold can reach £650,000 through the transferable nil rate band.
• There is also the residence nil rate band (RNRB) of £175,000 per person — available when a qualifying residential property is passed to direct descendants (children, grandchildren, or step-children — but not nephews, nieces, siblings, or friends) — bringing the combined maximum for a couple to £1,000,000. The RNRB is also frozen until at least April 2031 and tapers away by £1 for every £2 that the estate exceeds £2,000,000.

To illustrate how the transfer works, consider this example: David dies first, leaving his entire estate of £200,000 to his wife, Margaret. Because spouse-to-spouse transfers are exempt from IHT, David’s entire £325,000 nil rate band goes unused. When Margaret later dies, her executors can claim 100% of David’s unused NRB. Margaret’s estate therefore benefits from her own £325,000 NRB plus the full £325,000 transferred from David — a total of £650,000 before any IHT is payable.

Understanding these thresholds and how they interact is vital for effective estate planning. With the NRB frozen for over a decade and a half — while property prices have surged — more families than ever are being drawn into the IHT net. Making sure you claim every available allowance, starting with the transferable NRB, can make the difference between your family paying tens or even hundreds of thousands in tax or paying nothing at all.

The Concept of Transferable Nil Rate Band

When a spouse or civil partner passes away, any unused portion of their nil rate band doesn’t disappear — it can be transferred to the surviving partner and claimed when the second spouse dies. This mechanism was introduced in October 2007 and is one of the most valuable IHT reliefs available to couples.

What Does ‘Transferable’ Mean?

The term ‘transferable’ means that any percentage of the nil rate band not used on the first death can be carried forward and added to the surviving spouse’s or civil partner’s own NRB. The key word here is percentage. HMRC calculates the transfer as a proportion of the NRB available at the time of the first death, and then applies that same percentage to the NRB in force when the second spouse dies.

For example, if the first spouse died in 2005 when the NRB was £275,000, and they used £137,500 of it (50%), the remaining 50% is available for transfer. When the surviving spouse later dies and the NRB is £325,000, their estate can claim an additional 50% of £325,000 — which is £162,500. So the surviving spouse’s estate would have a total NRB of £325,000 + £162,500 = £487,500.

If the first spouse used none of their NRB — which is common when everything passes to the surviving spouse under the spouse exemption — then 100% transfers, giving the survivor a full double allowance of £650,000.

Eligibility Criteria for Transferability

To be eligible for the transferable nil rate band, several conditions must be met:

• The couple must have been married or in a civil partnership at the time of the first death. Cohabiting partners (regardless of how long they’ve lived together) do not qualify.
• The first spouse or civil partner must have died with some unused NRB. This is almost always the case where assets passed to the surviving spouse, as spouse-to-spouse transfers are exempt from IHT.
• A formal claim must be made by the executors or personal representatives of the surviving spouse or civil partner’s estate, using Form IHT402.
• The claim must be made within two years of the end of the month in which the surviving spouse or civil partner died (though HMRC has discretion to accept late claims in exceptional circumstances).

It’s essential to understand these criteria to determine whether you can benefit from the transferable nil rate band. For more detailed information on the nil rate band, you can visit our page on Inheritance Tax Nil Rate Band.

Importantly, the transferable NRB is available even if the first spouse died before October 2007 when the rules were introduced. HMRC will look back at the first death and calculate what percentage of the then-applicable NRB was unused — even if the death occurred decades ago. This means families who lost a spouse years ago may still be able to claim, provided the surviving spouse has since died or dies in the future.

Who Can Claim the Transferable Nil Rate Band?

Understanding who can claim the transferable nil rate band is crucial for maximising your inheritance tax reliefs. The claim is not made during the lifetime of the surviving spouse — it is made after the surviving spouse or civil partner dies, by the executors or administrators handling their estate.

Surviving Spouses and Civil Partners

The transferable nil rate band allowance benefits the estate of the surviving spouse or civil partner. When the first spouse or civil partner dies and some or all of their NRB goes unused (typically because everything passed to the surviving spouse under the spouse exemption), that unused percentage is “banked” for future use. It is then claimed when the surviving spouse or civil partner dies, effectively increasing the NRB available to their estate.

It’s worth noting that if a person has been widowed more than once, it may be possible to claim unused NRB from more than one deceased spouse. However, the maximum transferable NRB that can be claimed is capped at 100% of the NRB in force at the date of the second death — meaning no estate can benefit from more than double the standard NRB (currently £650,000).

Conditions for Claiming

To claim the transferable nil rate band, several conditions must be satisfied. The executors or personal representatives of the surviving spouse’s estate must submit the IHT402 form alongside the main IHT400 inheritance tax return. They will need to demonstrate what percentage of the first spouse’s NRB went unused, supported by evidence of the first estate’s value and how it was distributed.

In summary, claiming the transferable nil rate band requires the executors of the second estate to act within the deadline and provide accurate evidence of the first spouse’s unused NRB. This is one of those areas where keeping good records — including a copy of the first spouse’s will, grant of probate, and any IHT paperwork — can save a great deal of time and potential complications years or even decades later.

The Role of the IHT402 Form in Claims

The IHT402 form is the specific HMRC form used to claim the transferable nil rate band. Without it, HMRC will not apply the additional allowance to the surviving spouse’s estate — no matter how clearly the entitlement exists. Understanding its role is essential for anyone dealing with the estate of a deceased person who was married or in a civil partnership.

Purpose of Form IHT402

Form IHT402 is a supplementary schedule to the main IHT400 inheritance tax return. Its purpose is to provide HMRC with the information they need to calculate how much unused NRB can be transferred from the first spouse’s estate to the second. The form requires details about the first death — including the date of death, the value of their estate, how it was distributed, and what NRB was available at that time.

HMRC uses this information to calculate the percentage of unused NRB and then applies that percentage to the current NRB at the date of the second death. This is why the form asks about events that may have occurred many years — even decades — earlier.

When to Use Form IHT402

You should use Form IHT402 whenever you are dealing with the estate of a deceased person who was a surviving spouse or civil partner, and where their predeceased spouse or civil partner had some unused NRB. In practice, this applies to the vast majority of married couples, because leaving everything to your spouse (which is exempt from IHT) means 100% of the first spouse’s NRB goes unused.

The form must be submitted within two years of the end of the month in which the surviving spouse or civil partner died. For example, if Margaret dies on 15 March 2025, the deadline for submitting Form IHT402 is 31 March 2027. While HMRC has discretion to accept late claims in exceptional circumstances, it is always best to act well within this timeframe.

Here’s a practical example: John and Jane were married. John died first in 2010, leaving his entire estate to Jane under the spouse exemption. No IHT was payable on John’s death, and 100% of his £325,000 NRB went unused. When Jane dies in 2025, her executors complete Form IHT402, showing that John used 0% of his NRB. Jane’s estate therefore benefits from her own £325,000 NRB plus a further £325,000 transferred from John — a total NRB of £650,000. On an estate worth £600,000, this means zero IHT. Without the claim, the bill would have been £110,000.

How to Complete Form IHT402

Form IHT402 is a vital document for claiming the transferable nil rate band, and completing it correctly can save your family a significant amount in inheritance tax. The form requires detailed information about the first spouse’s estate, so preparation is key.

Necessary Information Required

To fill out Form IHT402 accurately, you’ll need to gather specific details about the first spouse or civil partner’s death and estate. This includes:

• The date of the first spouse’s death and the nil rate band that applied at that time (HMRC publishes historical NRB figures going back many decades)
• The gross value of the first spouse’s estate at the date of their death
• Details of how the estate was distributed — in particular, what passed to the surviving spouse (exempt), what passed to others (chargeable), and what was used by any lifetime gifts or transfers
• Any chargeable lifetime transfers or gifts made by the first spouse within seven years of their death, as these use up NRB
• A copy of the grant of probate or letters of administration from the first death, if available
• A copy of the first spouse’s will (or confirmation that they died intestate)

Gathering this documentation is often the most challenging part of the process, particularly if the first spouse died many years ago. If original documents cannot be found, it may be possible to obtain copies of the grant of probate from the Probate Registry, as grants are public records and available for a small fee.

Common Tips for Filling Out the Form

When completing Form IHT402, accuracy is everything. Here are some practical tips to help you avoid common pitfalls:

1. Calculate the percentage, not just the amount: HMRC works in percentages. If the first spouse used 30% of their NRB, 70% is available for transfer. Calculate this carefully — the percentage is then applied to the NRB at the date of the second death, which may be a different figure.
2. Don’t forget lifetime gifts: Any chargeable lifetime transfers or potentially exempt transfers that became chargeable (because the first spouse died within seven years) will have used up some of the NRB. These must be accounted for.
3. Gather supporting documents early: If the first death occurred decades ago, tracking down the original will, grant, and estate accounts may take time. Start this process as early as possible.
4. Seek professional advice if the situation is complex: If the first spouse made significant gifts, had business or agricultural property, or if there were multiple marriages, the calculation can become complicated. A solicitor or specialist inheritance tax adviser can ensure the form is completed correctly. For more information on the spouse exemption for inheritance tax, you can visit our detailed guide on spouse exemption for inheritance tax.

By following these guidelines and ensuring that you have all the necessary information, you can confidently complete Form IHT402 and claim the transferable nil rate band — potentially saving your family up to £130,000 in inheritance tax.

Submitting Your IHT402 Claim

With your IHT402 form completed, the next step is submitting it to HMRC alongside the main IHT400 inheritance tax return. Getting this right is essential — the transferable nil rate band claim will not be processed unless the form is submitted correctly and within the deadline.

Where to Send the Completed Form

Form IHT402 is not submitted on its own — it is a supplementary schedule that accompanies the main IHT400 return. The completed IHT400 and all supplementary pages (including the IHT402) should be sent to HMRC’s Inheritance Tax department. The current postal address is printed on the IHT400 form itself and is also available on the GOV.UK website. Always check for the most up-to-date address before sending, as HMRC occasionally changes its processing centres.

Before posting your forms, ensure you have:

• Completed and signed all relevant sections of both the IHT400 and IHT402
• Included all supporting documentation — particularly evidence relating to the first spouse’s estate (copy of will, grant of probate, estate accounts)
• Kept a complete copy of everything you send, including a record of the date of posting
• Used recorded or tracked delivery so you have proof of submission

For more information on transferring unused nil rate band between spouses, see our detailed guide.

Tracking Your Claim Status

After submitting your claim, HMRC will process the IHT400 return and the IHT402 together. Processing times vary depending on HMRC’s workload and the complexity of the estate, but you can generally expect an initial response within a few weeks. HMRC may write back to request additional information or clarification, particularly if the first spouse died many years ago and the records are incomplete.

To track your claim:

• Keep a note of the HMRC reference number assigned to the estate (this is usually on correspondence from HMRC)
• You can contact HMRC’s Inheritance Tax helpline to enquire about the status of your return
• If a solicitor or probate practitioner is handling the estate, they will typically manage this communication on your behalf

Understanding the transferable nil rate band rules and ensuring your paperwork is accurate from the outset will minimise the risk of delays. Incomplete forms or missing evidence relating to the first death are the most common reasons HMRC queries are raised — so thorough preparation pays dividends.

By following these steps and keeping thorough records, you’ll be well placed to successfully submit your IHT402 claim. If you have any concerns about the process or the complexity of the estate, seeking professional advice from a solicitor or specialist IHT adviser can ensure you maximise the available reliefs.

Potential Challenges in Claiming

Claiming the transferable nil rate band is usually straightforward, but certain challenges can arise — particularly where the first death occurred many years ago or where records are incomplete. Being aware of these potential pitfalls can help you avoid costly mistakes.

Common Mistakes to Avoid

The most frequent errors when completing Form IHT402 include:

• Failing to account for lifetime gifts: If the first spouse made chargeable lifetime transfers or potentially exempt transfers that failed (because they died within seven years), these use up NRB and reduce the percentage available for transfer. Overlooking these gifts can result in an incorrect claim.
• Using the wrong NRB figure: The NRB must be the figure that applied at the date of the first spouse’s death, not the current figure. HMRC will check this, and using the wrong figure will delay the claim.
• Missing the deadline: The claim must be made within two years of the end of the month in which the surviving spouse died. Missing this deadline means the claim cannot be made (except in very limited exceptional circumstances at HMRC’s discretion).
• Incomplete supporting evidence: If you cannot provide a copy of the first spouse’s will, grant of probate, or estate accounts, HMRC may be unable to process the claim. Start gathering these documents as early as possible.
• Not claiming at all: Perhaps the biggest mistake is simply not realising the claim exists. Many families miss out on tens of thousands of pounds in tax savings because the executors were unaware of the transferable NRB.

Attention to detail and early preparation are crucial in avoiding these issues.

Dealing with Declined Claims

If HMRC declines or queries your claim, it does not necessarily mean the entitlement doesn’t exist — it often means additional information is needed. You have the right to provide further evidence and, if necessary, to appeal. The most common reasons for queries include:

1. Insufficient evidence of the first estate: HMRC may ask for further documentation about the first spouse’s estate. If original documents have been lost, you can apply to the Probate Registry for a copy of the grant (grants are public records and available for a small fee). You may also need to reconstruct estate accounts from other sources, such as bank records, property records, or family papers.
2. Discrepancies in the calculation: If HMRC disagrees with the percentage of unused NRB claimed, review their calculation carefully. Errors can occur on both sides, and you’re entitled to challenge HMRC’s figures if you believe they are wrong.
3. Late submission: If you’ve missed the two-year deadline, you can write to HMRC explaining the circumstances and requesting that they exercise their discretion to accept a late claim. While this is not guaranteed, HMRC will consider reasonable explanations.

If you encounter difficulties, consulting a solicitor who specialises in inheritance tax can be invaluable. The potential tax saving — up to £130,000 — makes it well worth pursuing the claim even if initial hurdles arise.

Financial Implications of the Transferable Nil Rate Band

Claiming the transferable nil rate band can result in substantial IHT savings — and in many cases, it can eliminate the inheritance tax bill entirely. Understanding the financial impact helps you appreciate why this is one of the most important steps in the probate and IHT process.

How Much Can Be Saved?

The maximum saving from the transferable nil rate band is straightforward to calculate. If 100% of the first spouse’s NRB is transferred, the surviving spouse’s estate benefits from an additional £325,000 of nil rate band. At the 40% IHT rate, this equates to a saving of up to £130,000.

When you also factor in the transferable residence nil rate band (RNRB) — claimed using a separate form, IHT436 — the combined saving can be even greater. A married couple can potentially pass on up to £1,000,000 free of IHT (£325,000 NRB + £175,000 RNRB per person = £1,000,000 combined). Remember, the RNRB is only available where a qualifying residential property passes to direct descendants — children, grandchildren, or step-children — not to nephews, nieces, siblings, or friends.

To illustrate the potential savings:

Long-Term Benefits for Heirs

The long-term benefits of claiming the transferable nil rate band extend well beyond the immediate tax saving. By reducing the IHT liability, more of the family’s wealth is preserved for the next generation — and that additional capital can compound over time, providing financial security for children and grandchildren.

Consider a practical example: if a family saves £130,000 in IHT through the transferable NRB, and those funds are inherited by their children, that £130,000 could be used for a house deposit, to clear debts, to fund education, or simply to provide a financial safety net. The difference between paying £130,000 to HMRC or keeping it in the family is significant — and as Mike Pugh often says, “Keeping families wealthy strengthens the country as a whole.” For more information on inheritance tax planning as a single person, you can visit our detailed guide on navigating inheritance tax as a single person.

Key benefits include:

• Up to £130,000 saved in IHT through the transferable NRB alone — potentially up to £270,000 when combined with the RNRB
• Preservation of family wealth for future generations
• Greater financial security for the surviving spouse during their lifetime (knowing the estate plan is in order)
• Reduced stress and delay during the probate process, as a well-prepared IHT return is processed more quickly by HMRC

As Mike Pugh often says, “Not losing the family money provides the greatest peace of mind above all else.” The transferable nil rate band is one of the simplest and most effective ways to protect your family’s wealth — but only if you actually claim it.

Seeking Professional Help

While it’s possible to handle the transferable nil rate band claim yourself, there are situations where professional help is not just advisable — it’s essential. As Mike Pugh puts it, “The law — like medicine — is broad. You wouldn’t want your GP doing surgery.” Inheritance tax is a specialist area, and getting expert guidance can make a significant difference to the outcome.

When to Consult a Solicitor or Adviser

There are several scenarios where consulting a solicitor or specialist inheritance tax adviser is particularly beneficial:

• The first spouse died many years ago and records are incomplete or missing — a specialist can help reconstruct the estate information needed for the IHT402.
• There were lifetime gifts or trust arrangements made by the first spouse, which complicate the calculation of unused NRB.
• Multiple marriages: If the surviving spouse was previously widowed more than once, the rules on claiming from multiple deceased spouses are complex — and the total transferable amount is capped at 100% of the NRB at the date of the second death.
• The estate includes business or agricultural property that may qualify for Business Property Relief (BPR) or Agricultural Property Relief (APR), which interact with the NRB calculation. Note that from April 2026, BPR and APR will be capped at 100% relief for the first £1,000,000 of combined qualifying property, then 50% relief on any excess.
• The estate is large enough to be affected by the RNRB taper (estates over £2,000,000), where the residence nil rate band begins to reduce by £1 for every £2 above that threshold.
• You’re simply unsure about any aspect of the process — the potential saving of up to £130,000 makes it well worth investing in professional guidance to get it right.

Costs Involved in Professional Assistance

The costs of professional assistance vary depending on the complexity of the estate and the level of service required. As a general guide:

When you weigh these costs against a potential tax saving of up to £130,000, the return on investment is clear. Many families find that professional assistance not only saves them money but also reduces the stress and time involved in dealing with HMRC during an already difficult period. Trusts are not just for the rich — they’re for the smart — and the same principle applies to claiming every IHT relief you’re entitled to.

For more information on inheritance tax planning and how to minimise your family’s IHT liability, you can visit M&G Wealth for technical resources, or explore MP Estate Planning’s guide on paying inheritance tax without selling property.

Conclusion: Maximising Your Inheritance Tax Reliefs

The transferable nil rate band is one of the most valuable — and most commonly overlooked — IHT reliefs available to married couples and civil partners. When properly claimed using Form IHT402, it can double the inheritance tax threshold from £325,000 to £650,000, potentially saving your family up to £130,000 in tax. Combined with the residence nil rate band, a couple can pass on up to £1,000,000 free of IHT. To recap, understanding the transferable nil rate band rules and meeting the eligibility criteria are crucial steps in the process.

Key Steps in the Claim Process

To successfully claim the transferable nil rate band, executors must complete Form IHT402 accurately — including the correct percentage calculation based on the NRB at the date of the first spouse’s death — and submit it alongside the IHT400 return within two years of the end of the month in which the surviving spouse died. Gathering documentation from the first death early, including the will, grant of probate, and estate accounts, is essential for a smooth claim.

Acting Promptly

The two-year deadline for submitting the IHT402 may seem generous, but time passes quickly during the probate process — particularly when dealing with property sales, asset valuations, and the emotional weight of bereavement. Acting promptly ensures you don’t miss the deadline and forfeit a relief worth up to £130,000. Plan, don’t panic — and if the estate is complex, seek specialist advice early. Your family’s financial future may depend on getting this right.