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
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.