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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Calculating the transferable nil rate band: survivor was married to or in a civil partnership with someone who was entitled to TNRB from an earlier death; limitation at 100%

Following the example from [IHTM43032], if on Lucy’s death there had been no chargeable legacies the calculations would be as follows  

Unused nil rate band calculation

M = £375,000

VT = £Nil

M is greater than VT by £375,000

Transferable nil rate band calculation

E =£375,000

NRBMD = £300,000 so

(375,000 ÷ 300,000) × 100 = 125.0000%

On David’s death the nil rate band available on his death would be limited to 100% by IHTA84/S8A(5).