Transferable Nil-Rate Band Calculator
Calculate the percentage of unused Inheritance Tax threshold from a late spouse or civil partner.
£
The tax-free threshold when the first spouse died (usually £325,000 since 2009).
£
Value of assets left to anyone other than the spouse (e.g., children, friends) on first death.
£
The current standard threshold (currently £325,000).
Percentage Used (First Death):
0%
Percentage Unused (Transferable):
100%
Value of Transferable Amount:
£325,000
Total Survivor Nil-Rate Band:
£650,000
How to Calculate the Transferable Nil-Rate Band
In the United Kingdom, Inheritance Tax (IHT) is charged on the estate of a deceased person if the value exceeds the tax-free threshold, known as the Nil-Rate Band (NRB). Currently, this standard threshold is frozen at £325,000.
A unique feature of the UK tax system is the ability for spouses and civil partners to transfer any unused portion of their threshold to the surviving partner. This calculator helps you determine exactly how much can be transferred.
The "Percentage" Rule
Crucially, you do not transfer the cash amount unused at the time of the first death. Instead, you transfer the percentage of the band that was unused. This is beneficial because if the Nil-Rate Band increases between the first and second death, the survivor gets the benefit of the higher current rate.
Step-by-Step Calculation Logic
- Step 1: Identify the Nil-Rate Band in force at the time of the first spouse's death.
- Step 2: Calculate the value of assets passed to "chargeable beneficiaries" (non-exempt). Assets passed to the surviving spouse are exempt and do not use up the band.
- Step 3: Calculate the percentage used: (Chargeable Assets ÷ Historic NRB) × 100.
- Step 4: Determine the unused percentage: 100% – Used Percentage.
- Step 5: Apply this unused percentage to the current Nil-Rate Band to find the monetary value added to the survivor's estate.
Example Scenario
Mr. Smith died in 2010 when the NRB was £325,000. He left £162,500 to his children and the rest to his wife.
- He used exactly 50% of his allowance (£162,500 is half of £325,000).
- Therefore, 50% remained unused.
- When Mrs. Smith passes away today (Current NRB £325,000), her estate can claim that unused 50%.
- Transferable amount: 50% of £325,000 = £162,500.
- Mrs. Smith's Total Allowance: £325,000 (Own) + £162,500 (Transferred) = £487,500.
Note: This calculator focuses on the standard Nil-Rate Band. It does not calculate the Residence Nil-Rate Band (RNRB), which applies specifically to family homes passed to direct descendants.