IHT Married Couples Allowance UK: What Are the Real IHT Benefits of Marriage? (2026)
There is no specific 'IHT married couples allowance' — the Married Couple's Allowance is an income tax relief. For IHT, marriage gives three major protections: the unlimited spousal exemption (s18 IHTA), the transferred NRB (s8A IHTA — up to £325,000 extra), and the transferred RNRB (s8G IHTA — up to £175,000 extra). Together: a combined threshold of up to £1,000,000. Unmarried partners get none of these benefits.
| IHT Benefit | Married / Civil Partner | Unmarried / Cohabiting |
|---|---|---|
| Transfer assets during lifetime — IHT | 100% exempt — spousal exemption (s18 IHTA) | PET — 7yr rule; CLT if into trust |
| Leave estate to partner on death — IHT | 100% exempt — spousal exemption (s18 IHTA) | Taxed at 40% above NRB (£325k) if no will / willed to partner |
| NRB available on second/survivor's death | Up to £650k (own NRB + transferred NRB — s8A IHTA; claim IHT402) | £325k per person — no transfer possible |
| RNRB available on second/survivor's death | Up to £350k combined (own RNRB + transferred — s8G IHTA; claim IHT436) | £175k per person — no transfer possible |
| Total IHT threshold (home to children) | £1,000,000 combined on second death | £500,000 per person — no combination |
| CGT on lifetime transfers between partners | No gain/no loss (s58 TCGA 1992) — no CGT | Gift at market value — CGT may arise (s17 TCGA 1992) |
| Partner inherits home above NRB — IHT | Exempt (spousal exemption) — £0 IHT | 40% IHT on value above NRB (£325k) — major risk for cohabiting couples |
2026/27. Spousal exemption: s18 IHTA 1984 — unlimited, lifetime and on death. Transferred NRB: s8A IHTA 1984 (FA 2008); claim IHT402 on second death; applies retrospectively to first deaths from 9 October 2007. Transferred RNRB: s8G IHTA 1984; claim IHT436 on second death. CGT inter-spouse: s58 TCGA 1992 (no gain/no loss on lifetime transfers). Non-UK domiciled spouse: spousal exemption capped at £325,000 (additional NRB-sized exemption only). Divorce: spousal exemption ceases on decree absolute/final order.
IHT Benefits of Marriage: Complete Guide
The 'married couples allowance' confusion — income tax vs IHT
Many people search for the 'married couples allowance' in the context of inheritance tax, expecting to find a specific IHT relief for being married. There is no IHT-specific 'married couples allowance'. The Married Couple's Allowance (MCA) is an income tax relief — it applies to one or both partners born before 6 April 1935, or where the marriage or civil partnership was registered before 5 December 2005 and certain conditions are met. The MCA reduces the income tax bill by a fixed amount (up to £1,037.50 in 2026/27) — it has no connection to inheritance tax whatsoever. For inheritance tax, the benefits of marriage and civil partnership are different and far more substantial: (1) the spousal exemption (unlimited IHT exemption on transfers between spouses); (2) the transferred nil-rate band; and (3) the transferred RNRB. These three reliefs together mean that a married couple can achieve a combined IHT threshold of up to £1,000,000 — whereas unmarried partners effectively have independent NRBs of £325,000 each, with no ability to share or transfer them.
The spousal exemption (s18 IHTA 1984) — unlimited IHT exemption
The spousal exemption (s18 IHTA 1984) exempts all transfers of assets between spouses (and civil partners) from IHT — whether during lifetime or on death, and with no upper limit. Lifetime: a husband gives £1,000,000 to his wife — £0 IHT (spousal exemption applies; not a PET). On death: a wife leaves her entire estate of £3,000,000 to her husband — £0 IHT (s18 applies; no upper limit). This allows married couples to defer IHT until the second death — at which point the combined NRBs and RNRBs (up to £1,000,000) can substantially reduce or eliminate the IHT bill. Important: the spousal exemption applies only to transfers where the recipient is the spouse or civil partner. On the death of the second spouse: the full estate (including what was inherited from the first spouse) is subject to IHT — but the combined NRBs and RNRBs provide a much larger threshold. Non-UK domiciled spouse limitation: where the recipient spouse is not UK domiciled, the spousal exemption is capped at £325,000 (an additional NRB-sized exemption) above which normal IHT applies — this is to prevent unlimited tax-free transfers to non-domiciled spouses who then take the assets outside the UK IHT net.
Transferred nil-rate band (s8A IHTA 1984) — how couples can double the NRB
The transferable nil-rate band (s8A IHTA 1984, introduced by Finance Act 2008, effective for deaths from 9 October 2007 retrospectively) allows the unused NRB from the first spouse's death to transfer to the survivor. The calculation: unused NRB percentage at the first death × NRB in force at the second death. If the first spouse left everything to the surviving spouse (no estate above the NRB using spousal exemption): 100% of the NRB is unused. 100% × £325,000 (NRB at second death, 2026/27) = £325,000 transferred NRB. Combined NRB on second death: £325,000 (own) + £325,000 (transferred) = £650,000. Multiple predeceased spouses: if the survivor had multiple predeceased spouses who each left 100% NRB unused, the cap is still 100% transferred NRB (you cannot accumulate more than 200% NRB total = £650,000). The transferred NRB is NOT automatic: it must be claimed on form IHT402 with the IHT400 on the second death, supported by evidence from the first death (death certificate, marriage certificate, details of the first estate). Retrospective application: the transferred NRB applies even to first deaths before October 2007 — executors of the second estate can claim the transferred NRB back to 1975 (the start of the modern IHTA).
Cohabiting (unmarried) couples — the IHT risk and how to mitigate it
Cohabiting couples have no access to the spousal exemption, the transferred NRB, or the transferred RNRB. Each partner is treated as a stranger for IHT — despite potentially sharing a home and finances for decades. The consequences: (1) Leaving assets to a cohabiting partner: a gift or bequest to an unmarried partner is a PET (if to an individual) — IHT-free only after 7 years from the date of the gift. On death: assets left to an unmarried partner are NOT exempt from IHT — they are part of the taxable estate. The partner receiving assets above the NRB (£325,000) will face a 40% IHT liability. Example: a cohabiting man leaves his estate of £700,000 (including their jointly owned home at £500,000) to his partner. The estate is assessed in full: NRB £325,000 + RNRB £175,000 (if home to 'direct descendants' — but the partner is not a direct descendant unless they are the children's parent?) = IHT on excess. Actually — the RNRB only applies where the home passes to direct descendants of the deceased. A cohabiting partner inheriting the home is NOT a direct descendant. Without the RNRB: NRB only £325,000. Taxable estate = £375,000. IHT = £150,000. Mitigation for cohabiting couples: (a) will planning to leave assets to children on the first death and each partner's NRB to support the survivor; (b) life insurance in trust (covering the IHT on death); (c) marriage or civil partnership (if appropriate — triggering the full spousal exemption and transferred NRBs); (d) tenants in common rather than joint tenants (to allow the first to die to leave their share to children — preserving NRB + RNRB — rather than the share automatically passing to the survivor by survivorship).
Frequently Asked Questions
What is the IHT married couples allowance?
There is no specific 'IHT married couples allowance'. The Married Couple's Allowance is an income tax relief (not IHT). For inheritance tax, marriage provides three key benefits: (1) Spousal exemption (s18 IHTA 1984): all transfers between spouses are completely exempt from IHT — no limit; (2) Transferred nil-rate band (s8A IHTA 1984): unused NRB from the first death transfers to the survivor — combined NRB up to £650,000 (claim IHT402); (3) Transferred RNRB (s8G IHTA 1984): unused RNRB from first death transfers — combined RNRB up to £350,000 (claim IHT436). Total combined threshold for a married couple: up to £1,000,000 (home to children).
How much IHT do married couples pay?
A married couple who structure their affairs correctly often pay £0 IHT. The combined threshold is up to £1,000,000 (NRB £650,000 combined + RNRB £350,000 combined = £1m where home passes to direct descendants on the second death). Example: couple with £800,000 estate. First to die leaves everything to the survivor (spousal exemption — £0 IHT). Survivor on second death: NRB £650,000 (both NRBs via s8A IHTA, claim IHT402) + RNRB £350,000 (both RNRBs via s8G IHTA, claim IHT436) = £1,000,000 threshold. Estate £800,000 below threshold → IHT = £0. For the combined threshold to work: the will must direct the home to direct descendants (children/grandchildren) on the second death; IHT402 and IHT436 must be claimed on the second estate's IHT400.
Do cohabiting couples have the same IHT benefits as married couples?
No — cohabiting (unmarried) couples have no access to the spousal exemption, transferred NRB, or transferred RNRB. Assets left to an unmarried partner are subject to full 40% IHT above the NRB (£325,000). The RNRB (£175,000) does not apply where the home passes to an unmarried partner (they are not a 'direct descendant'). Compare: married couple, £800,000 estate, £0 IHT (combined £1m threshold). Cohabiting couple, £800,000 estate: each has NRB £325,000 + RNRB £175,000 (only if home to their own children). If the first to die leaves everything to the partner: taxable estate = £800,000 − £325,000 (NRB only, no RNRB for partner) = £475,000. IHT = £190,000. Mitigation: wills directing assets to children, life insurance in trust, or marriage.
What happens to the IHT nil-rate band when a spouse dies?
When the first spouse dies and leaves assets to the surviving spouse (spousal exemption — s18 IHTA), their NRB is unused. That unused NRB percentage transfers to the survivor (s8A IHTA 1984, claim IHT402 on the second death). On the second death: the survivor's own NRB (£325,000) + the transferred NRB (up to £325,000) = combined NRB up to £650,000. The transfer is based on the unused percentage at the first death, multiplied by the NRB at the second death. If the first spouse used some NRB (e.g. left £100,000 to children directly): unused NRB = £225,000 (69.2% of £325,000). Transfer: 69.2% × £325,000 = £225,000 extra NRB on the second death. The claim is not automatic — it requires IHT402 and supporting evidence from the first estate.
Does the spousal exemption apply to unmarried partners?
No — the spousal exemption (s18 IHTA 1984) applies only to legally married couples and civil partners. Cohabiting partners, regardless of how long they have lived together or how intertwined their finances are, do not benefit from the spousal exemption for IHT. Assets passing to an unmarried partner on death are part of the taxable estate — IHT at 40% applies above the NRB (£325,000). This is one of the biggest IHT traps for cohabiting couples, particularly where the estate includes property. The fix: make a will to ensure assets go to the right people in the most tax-efficient way, and consider tenants in common (rather than joint tenants) for the family home to allow each partner's share to pass to children (preserving the RNRB) rather than to the survivor automatically.
Claim the £1,000,000 Threshold — Make Sure Both Wills Are in Order
The £1,000,000 combined IHT threshold for couples works only if the wills direct the home to children (RNRB), IHT402 and IHT436 are claimed, and the first estate passes everything to the survivor. WillSafe will kits for England and Wales, from £39.99, provide the foundation.
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