Widows and Widowers Treble and Quadruple Inheritance Tax Allowances

Published / Last Updated on 27/05/2022

Nil Rate Bands for Inheritance Taxes

It is well known that everyone in the UK has inheritance tax nil rate bands:

  • Main nil rate band for Inheritance Tax (NRB) = £325,000
  • Private residence nil rate band (RNRB) = £175,000 (if you own your home and you leave the property on death to your blood line children/grandchildren)
  • Total NRB = £500,000

Married and Civil Partnerships

Gifts between spouses and civil partners on death are free of inheritance tax anyway so on 1st death, none of the nil rate bands are used unless you leave assets and wealth to others family members, friends or charities.

Unused NRBs – Double Nil Rate Band

If you leave all your wealth to your spouse/civil partner, your nil rate bands are unused.  Your unused allowances (£500,000) can be passed to your surviving partner on 1st death meaning that your survivor has their own allowances of up to £500,000 plus they can double this by another £500,000 (deceased partner’s unused allowance) meaning a total in nil rate band allowances of £1m.

Get Married Again - Treble Nil Rate Bands

The Question:  Can a widow (or widower) who remarries and is then widowed again i.e., their 2nd spouse also dies before them, keep their existing £1m in combined nil rate band allowances from the first marriage and then add a new unused nil rate band allowance from their now deceased 2nd spouse?  This would mean they have would have 3 nil rate bands i.e..  up to £1.5m.

Answer:  No and Yes.  

  • No: The maximum amount that an individual can claim is one additional nil rate band.  You are only allowed to increase your nil rate band by 100%.  i.e., you can only double your nil rate band.
  • Yes:  If, when, you make a new Will on marriage that leaves a legacy to loved ones e.g., by setting up a nil rate band trust i.e., you leave up to £500,000 to your children, grandchildren, and other loved ones and not your 2nd partner.  On your death you have then have already used up the unused nil rate band from marriage 1.  You executors and trustees are then able to claim your deceased 2nd partner’s unused nil rate band effectively meaning you have already doubled.  In these circumstances, many widows that intend to marry again establish a discretionary trust either in life or death to ensure that children/grandchildren from the first marriage have assets protected on death.

Examples for Double, Treble and Quadruple Nil Rate Bands

  • Jayne and Harry are married with children.  Harry dies and leave all assets to Jayne.  He has not used up any nil rate band.  Harry’s £500,000 unused nil rate band is passed to Jayne meaning that on Jayne’s death, she now has double allowances i.e., £1m nil rate band.
  • Their neighbours, Bert and Betty are married with children.  Betty dies and leave all assets to Bert.  She has not used up any nil rate band.  Betty’s £500,000 unused nil rate band is passed to Bert meaning that on Bert’s death, he also has double allowance i.e., £1m nil rate band.

2nd Marriage:  Scenario 1 – Double Allowance.  Jayne and Bert comfort each other over their bereavements, become very close and decide to get married.  Jayne then dies leaving everything to Bert having not used any allowances.  Could Bert claim Betty’s unused allowance plus Jayne’s unused allowance plus his own?  On Bert’s subsequent death, his executors and trustees are only allowed to claim one additional unused nil rate band i.e., up to £1m.

2nd Marriage:  Scenario 2 – Treble Allowance.  Both widows Jayne and Bert still get married.  In each of their wills on marriage, they leave a discretionary nil rate band trust i.e., up to £500,000 to their own respective children, families and other ones loved.  On death of Jayne (and vice versa).  Jayne leaves £0.5m in a discretionary trust (in life or on death) for loved ones meaning she has gifted £500,000 and has just one inheritance tax allowance left and the rest of her estate to Bert.  Bert then dies and he too can only have the double nil rate band allowance.  This means 3 nil rate band allowances have been used.  There is no guarantee that Bert will leave any assets (including inherited wealth from Jayne) in his will to Jayne’s children/grandchildren from her first marriage to Harry.

Co-Habit/Do Not Marry:  Scenario 3 – Quadruple Allowance.  Widows Jayne and Bert do not get married but decide to live together and be life companions.  They leave up to £1m each of all their assets on death in a discretionary will trust for their children with a life interest trust for their ‘life companion’ (so that should either one die), the survivor can still use/benefit/borrow from the assets held in trust for their own children/grandchildren.  Jayne dies leaving £1m in a trust in her will for her children and loved ones.  She still had two nil rate band allowances (her own and her first husband Harry’s unused allowance) i.e., Double allowances have been used up to £1m.  Bert can still use the assets in Jayne’s trust as he has a life interest to use the assets in Jayne’s Trust that is beneficially owned by Jayne’s children with Harry.   Bert then dies, he too has two nil rate band allowances (his own and his first wife Betty’s unused allowance) i.e., Double allowances have been used again up to £1m.   Result:  Quadruple i.e., 4 X Nil Rate Band Allowances have been used overall.

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