Most people know there is an inheritance tax allowance. Far fewer know that when a husband, wife or civil partner dies, their unused inheritance tax allowance does not vanish. It can pass to the person they leave behind, but not on its own: somebody has to claim it, and there is a deadline.

We come across this often. A widow or widower dies some years after their partner, the family assumes the tax position is what it is, and nobody realises a second allowance was sitting there unused. It is an expensive misunderstanding, and usually avoidable.

The two inheritance tax allowances, in plain English

Inheritance tax is charged at 40% on the part of an estate above the threshold. Two thresholds matter, and they stack.

The first is the basic allowance, which HMRC calls the nil-rate band. It is £325,000, and has been fixed at that figure since the 2009 to 2010 tax year. The second is the residence nil-rate band, worth up to £175,000, which applies where a home passes to children or grandchildren. Between them, one person's threshold can reach £500,000.

Anything left to a husband, wife or civil partner is normally exempt from inheritance tax anyway. That is what creates the situation: the first death often uses none of the allowance, because everything went to the surviving partner.

What transfers is a percentage, not a fixed sum

The survivor inherits the percentage of the allowance that went unused, rather than a set sum. If none of the first partner's basic allowance was used, 100% transfers, and the survivor's estate can have up to £650,000 of basic allowance.

HMRC's own example: Carole dies leaving an estate of £600,000. She leaves £130,000 to her children and the rest to her husband, Simon. The threshold at the time was £325,000, so she used 40% of it and left 60% unused. When Simon dies, his own threshold becomes £325,000 plus 60% of £325,000, or £520,000.

Because it is a percentage, the survivor's estate picks up any later rise in the allowance. Both are frozen at current levels until at least 5 April 2030, so none is expected before then.

For married couples there is no cut-off date for when the first death happened, so long as they were married at the time. For civil partners, the first death needs to have been on or after 5 December 2005, when civil partnerships began in the UK. Where the first death was decades ago the position needs checking: the exemption for husbands and wives was limited before 13 November 1974, so part of the allowance may already have been used.

The allowance for the family home works the same way

The residence allowance can also be carried forward. If the first partner died before 6 April 2017, before this allowance existed, HMRC treats the unused share as 100%, so a full allowance can still transfer. That does not hold if the first estate was worth more than £2 million, because the taper below reduces what transfers.

Two conditions narrow it. The home has to be inherited by direct descendants: children, grandchildren and other lineal descendants, stepchildren, adopted and foster children, a child they were guardian or special guardian of while that child was under 18, and the husband, wife or civil partner of a lineal descendant. Nieces, nephews, brothers and sisters do not count. The allowance also tapers for larger estates, falling by £1 for every £2 the estate exceeds £2 million.

Claiming it, and the two-year deadline

The transfer is not automatic. The personal representatives, usually the executors named in the Will, have to claim it, and how they do that depends on the estate. Where a full inheritance tax account is needed, the basic allowance is claimed on form IHT400 with schedule IHT402, and the residence allowance on form IHT435, with IHT436 for any share transferred from a late partner. Where the second death was on or after 1 January 2022 and no full account is needed, the claim is made when applying for probate instead.

The claim normally has to reach HMRC within 24 months of the end of the month in which the second person died, or within three months of the executors starting to act, if later. HMRC can extend the period at its discretion, and nobody should plan around that.

What to keep safe now

A claim made years later depends on showing what happened at the first death. If you have been widowed, keep these where your family will find them:

• the death certificate, and your marriage or civil partnership certificate
• a copy of your partner's Will, or a note that their estate passed under the intestacy rules
• the grant of probate, if one was obtained
• a record of what was left to whom, and what the estate was worth

Families who cannot find these pay someone to piece them together, and sometimes the allowance goes unclaimed. Ten minutes with a folder now can save your executors a great deal of work.

Where this leaves you

For a married couple or civil partners, the two allowances together can be worth up to £1 million, but only where the paperwork supports the claim and the home passes to the right people. If you have been widowed, it is worth checking what was used at your partner's death, since that shapes what your executors can claim.

For a rough idea of where your estate stands, our inheritance tax calculator is a starting point, though it gives an estimate rather than a figure to rely on. You are welcome to book a free consultation and talk it through. No pressure, just a friendly chat.

This article is general information for England and Wales, correct as at 20 October 2026 and based on 2026 to 2027 tax year figures. It is not legal or financial advice, and the rules can change, including at the Budget on 28 October 2026. Please seek personal advice about your own circumstances.