I4.161A Nil rate band transfer―operation of relief
Anyone who dies after 8 October 2007 who has previously been in a marriage (or civil partnership), where the marriage came to an end on the death of the other spouse (or civil partner), may make use of any nil rate band which was not used on the death of the predeceasing spouse, irrespective of when the predeceasing spouse died1.
The essential scheme is that, in calculating the IHT on the second death, the nil rate band in the applicable IHT rate table at the time of the second death is increased by a percentage. This percentage increase is the percentage of the nil rate band applicable at the time of the first death which was not then used up (subject to a maximum of 100% increase on the second death). The increase has to be claimed, and the personal representatives on the second death have to be able to demonstrate to the satisfaction of HMRC the extent of the unused nil rate band on the first death (see I4.161B). If the marriage or civil partnership had been dissolved or annulled before the first death these provisions do not apply.
Calculating the increase in the nil rate band
The increase in the nil rate band is to be calculated as follows, where A is the first to die of a married couple or civil partnership, and B is the second to die:
(1) Work out the maximum amount which could have been the subject
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