IHTM43040 - Calculating the transferable nil rate band: simultaneous deaths
The rules that govern what happens when spouses or civil partners die at the same time (IHTM12191) are different in England and Wales from those in Scotland and Northern Ireland. For this reason, the extent to which the nil rate band is unused on the first death varies.
In England and Wales, where spouses or civil partners die at the same time leaving a Will and it is not possible to establish who died first, the presumption is that the elder person died first. The couples’ estates are treated for Inheritance Tax on this basis and where the terms of the Will mean that there is unused nil rate band on the death of the first, it is available to be transferred to the estate of the surviving spouse or civil partner. IHTA84/S4(2) continues to operate on the death of the younger to exclude the assets received from the estate of the elder.
So in effect, the younger person’s estate could benefit from a double nil rate band and the assets accruing to their estate from the elder are excluded. If the couple had died without leaving a Will, the presumption does not apply, so each person’s estate would pass on to their heirs under intestacy. In the event that one spouse or civil partner had any unused nil rate band, it is available to be transferred to the estate of the other in the normal way.
In Scotland and Northern Ireland, the spouses, or civil partners, are treated as dying at the same moment, so neither can inherit from the other. Each person’s estate will pass on to their heirs whether by Will or under intestacy. In the event that one spouse or civil partner had any unused nil rate band, it is available to be transferred to the estate of the other in the normal way.