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HMRC internal manual

Inheritance Tax Manual

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HM Revenue & Customs
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Calculating the transferable nil rate band: survivor has been married to more than one spouse or been in more than one civil partnership; limitation at 100%

Following the example from [IHTM43030], if Mei’s second husband Jack had left £55,000 to his niece the calculations would have been as follows

Unused nil rate band calculation

M = £275,000

VT = £55,000

M is greater than VT by £220,000

Transferable nil rate band calculation

E =£220,000

NRBMD = £275,000 so

(220,000 ÷ 275,000) × 100 = 80.0000%

This would mean that on Mei’s death in January 2008, the nil rate band available on her death would potentially be

£300,000 + (300,000 x 60%) + (300,000 x 80%) = £720,000.

Under IHTA84/S8A(5) this will be limited to £600,000.