IHT and Civil Partners UK: Inheritance Tax for Civil Partnerships, Spousal Exemption, and Transferred NRB (2026)
Civil partners have identical IHT treatment to married couples — full spousal exemption, transferred NRB and RNRB, and a combined £1,000,000 threshold. Opposite-sex civil partnerships have been available since December 2019. Cohabiting couples without marriage or civil partnership have NO IHT exemption for transfers between them — a £10,000+ exposure that can be removed by a civil partnership.
| Couple Type | Spousal Exemption (s18 IHTA)? | Transferred NRB? | Combined IHT Threshold |
|---|---|---|---|
| Married couple | Yes | Yes | Up to £1,000,000 |
| Civil partners (same-sex) | Yes | Yes | Up to £1,000,000 |
| Civil partners (opposite-sex, from Dec 2019) | Yes | Yes | Up to £1,000,000 |
| Cohabiting (no marriage / civil partnership) | No | No | £325,000 NRB only (per person) |
| Separated (not divorced/dissolved) | Yes (still legally married/CP) | Yes (if formally divorced/dissolved: no) | Up to £1,000,000 until dissolution |
IHT and Civil Partnerships: Complete Guide
Civil partners and IHT: the same rules as married couples
The Civil Partnership Act 2004 created civil partnerships for same-sex couples in the UK. From 31 December 2019, the Civil Partnerships, Marriages and Deaths (Registration etc) Act 2019 extended civil partnerships to opposite-sex couples. For inheritance tax, civil partners have identical treatment to married couples under the IHTA 1984: (1) Spousal exemption (s18 IHTA 1984): transfers of assets between civil partners during their lifetime are exempt from IHT as potentially exempt transfers, and transfers on death to a surviving civil partner are fully exempt from IHT — no limit on the amount that can pass between civil partners free of IHT. (2) Transferred nil-rate band (s8A IHTA 1984): where the first civil partner to die leaves their estate entirely to the survivor (using the full spousal exemption), their unused NRB transfers to the surviving civil partner — potentially doubling the NRB on the second death. (3) Transferred RNRB (s8G IHTA 1984): the unused RNRB transfers to the surviving civil partner in the same way as for married couples. Civil partnerships registered in other jurisdictions: recognised under the Civil Partnership Act 2004 (Overseas Relationships) Regulations — the IHT spousal exemption applies to overseas registered civil partnerships that are equivalent to a UK civil partnership.
Forming a civil partnership to secure IHT benefits: opposite-sex couples
Before December 2019, only same-sex couples could form a civil partnership in the UK. Many opposite-sex couples who had been living together for decades — sometimes with children together, sometimes owning a home jointly — were not eligible for a civil partnership and chose not to marry. From 31 December 2019, opposite-sex couples can form a civil partnership. The IHT implications of forming a civil partnership are significant: (1) Transfers of assets between civil partners become immediately IHT-exempt (spousal exemption); (2) Joint assets and the family home can be restructured to take advantage of the spousal exemption; (3) On the first death, the entire estate can pass to the survivor free of IHT (under the spousal exemption), with the NRB and RNRB transferring to the second estate; (4) A will can direct the estate to the surviving civil partner on first death, then to children on second death — with the full £1,000,000 combined IHT threshold (NRB + RNRB × 2) available. Couples who have lived together without marriage or civil partnership for years — sometimes decades — have no IHT protection between them: any transfer of assets is a PET (with a seven-year clock) or a potentially taxable transfer during their lifetimes, and no spousal exemption applies on the first death.
Cohabiting couples with no civil partnership or marriage: IHT exposure
Cohabiting couples (living together without a marriage or civil partnership) have no IHT exemption for transfers of assets between them. This is one of the most significant and underappreciated financial risks for long-term cohabiting couples: (1) On the first partner's death, their estate does not pass to the survivor under a spousal exemption — IHT applies in full (40% above the NRB) unless the deceased's assets pass to qualifying exempt beneficiaries. (2) There is no transferred NRB or RNRB for the surviving partner — they have only their own NRB (£325,000) and, if applicable, their own RNRB (£175,000). (3) Cohabiting couples who own property together typically own it as tenants-in-common (or as joint tenants — passing by survivorship) — but the survivorship or tenants-in-common share passing to the surviving partner is NOT exempt from IHT (no spousal exemption). Example: unmarried couple with joint property worth £700,000. First partner dies leaving their half (£350,000) to the survivor. IHT: £350,000 − NRB £325,000 = £25,000 × 40% = £10,000 IHT. If they had been married or in a civil partnership, the transfer would be fully exempt. For couples who cannot or choose not to marry, life insurance (whole-of-life policy in trust for the surviving partner) can fund the IHT bill — providing cash to pay the IHT without the surviving partner having to sell assets.
Transfers between civil partners during lifetime: IHT and CGT
Transfers between civil partners during their lifetime are exempt from IHT. They are also transferred on a no-gain/no-loss basis for CGT (s58 TCGA 1992 — the civil partner equivalent of the spousal no-gain/no-loss rule for married couples). This means: (1) Civil partners can freely redistribute assets between them (e.g. moving investment portfolios to the lower-income or lower-CGT-rate partner, or moving assets to the partner with more available NRB) without IHT or CGT consequences. (2) On separation and dissolution of a civil partnership, the no-gain/no-loss CGT treatment continues for disposals between the partners in the tax year of separation (and under Finance Act 2023 for transfers up to three years after separation, or until the civil partnership is dissolved). (3) Civil partners can give the family home to each other without CGT (no-gain/no-loss) and without IHT (spousal exemption).
RNRB for civil partners: qualifying conditions
The Residence Nil-Rate Band (RNRB — s8D IHTA 1984) applies to civil partners in the same way as to married couples: (1) The RNRB is available when the civil partner's home (or a share of it) passes to direct descendants (children, stepchildren — including step-children from a previous relationship — grandchildren) on death. (2) The unused RNRB from the first civil partner's death transfers to the surviving civil partner's estate (s8G IHTA 1984 — transferred RNRB). (3) If the first civil partner left everything to the surviving partner under the spousal exemption, 100% of the RNRB transfers — giving up to £350,000 RNRB on the second death. Stepchildren of the civil partner: s8K(4) IHTA 1984 treats stepchildren as direct descendants for RNRB purposes — where a person's civil partner's child or step-child inherits the home, the RNRB applies. Civil partners without children: neither partner has direct descendants — the RNRB (£175,000 per person) is unavailable; the combined IHT threshold is only £650,000 (NRB × 2).
Making and updating a will after forming a civil partnership
Forming a civil partnership revokes any existing will made before the civil partnership (under s18B Wills Act 1837, as amended — a will made in contemplation of a specific marriage or civil partnership may not be revoked). A will should be made (or updated) immediately on forming a civil partnership to: (1) Direct the estate to the surviving civil partner on the first death (securing the spousal exemption and NRB/RNRB transfer); (2) Direct the estate to qualifying descendants (children, including stepchildren) on the second death to secure the RNRB; (3) Appoint the civil partner as executor and trustee; (4) Make specific provision for children from previous relationships — particularly where they are not the biological or adopted children of the civil partner; (5) Consider a life interest trust (IPDI) for the surviving civil partner where there are children from previous relationships. Existing wills made before the civil partnership are revoked — unless made in contemplation of the civil partnership (s18B Wills Act 1837). Review all existing documents: previous wills, nomination forms for pensions and life insurance, LPA nominations, joint property ownership.
Frequently Asked Questions
Do civil partners have the same inheritance tax rights as married couples?
Yes. Civil partners under the Civil Partnership Act 2004 have identical IHT treatment to married couples: full spousal exemption (s18 IHTA 1984) on transfers during life and on death; transferred nil-rate band (s8A IHTA 1984) on the second death; transferred RNRB (s8G IHTA 1984); same RNRB qualifying conditions. Civil partnerships have been available to opposite-sex couples since 31 December 2019. Overseas civil partnerships equivalent to a UK civil partnership are also recognised.
Can I get the IHT spousal exemption if I am not married or in a civil partnership?
No. The IHT spousal exemption (s18 IHTA 1984) is available only to spouses (married couples) and civil partners. Cohabiting couples (living together without marriage or civil partnership) have no IHT exemption for transfers between them. On the first partner's death, the deceased's estate is subject to IHT above the NRB (£325,000) — even if the assets pass to the surviving partner. Forming a civil partnership (or marrying) would give both partners the full spousal exemption, transferred NRB, and RNRB benefits.
Can opposite-sex couples form a civil partnership in the UK?
Yes — since 31 December 2019 (Civil Partnerships, Marriages and Deaths (Registration etc) Act 2019). Opposite-sex couples can now form a civil partnership, which gives the same IHT treatment as marriage: spousal exemption, transferred NRB, RNRB. For long-term opposite-sex cohabiting couples, forming a civil partnership significantly improves their IHT position — particularly where they have a family home together and want to leave assets to each other on death without an IHT bill.
Does forming a civil partnership revoke an existing will?
Yes. Forming a civil partnership revokes any existing will made before the civil partnership (s18B Wills Act 1837, as amended — applies to wills not made in contemplation of the specific civil partnership). A new will should be made immediately after forming a civil partnership to direct the estate appropriately (to the surviving civil partner, then to children) and to secure the RNRB on the second death.
What is the IHT threshold for a civil partnership?
The combined IHT threshold for civil partners is the same as for married couples: where the first civil partner leaves everything to the survivor (fully exempt), the survivor's estate has up to £650,000 NRB (£325,000 own + £325,000 transferred) plus, if the home passes to direct descendants on the second death, up to £350,000 RNRB (£175,000 own + £175,000 transferred) = £1,000,000 combined threshold. The RNRB tapers for estates above £2,000,000.
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