IHT on Second Marriages UK: Stepchildren, the Residence Nil Rate Band, and Protecting Children from the First Marriage
Second marriages create competing IHT interests: the surviving spouse's needs; the first marriage children's inheritance; and a RNRB that is lost if the home passes to stepchildren rather than biological descendants. An IPDI life interest trust is the standard solution — it protects everyone while preserving the RNRB.
IHT in Second Marriages: Key Issues
The RNRB and stepchildren: the key restriction
The Residence Nil Rate Band (RNRB — up to £175,000) is only available where a qualifying residential property passes to a 'direct descendant' of the deceased. Under s8K(2) IHTA 1984, 'direct descendant' means a child, grandchild, or remoter lineal descendant of the deceased — and their spouses, civil partners, and widowed spouses. Stepchildren are explicitly excluded from the definition of 'direct descendant' unless they have been legally adopted by the deceased. A step-parent leaving the family home to a stepchild (not adopted) cannot claim the RNRB on that bequest. The RNRB is only available if the home (or a share of it) passes to the deceased's own biological or adopted children or grandchildren. This is a significant trap in second marriages: if the deceased leaves the family home entirely to the surviving second spouse (who has no qualifying direct descendants in the estate), and then on the second spouse's death the home passes to their own biological children only — the deceased's RNRB is not used on the first death and may be transferable to the second spouse.
Transferable RNRB (TRNRB) in second marriages
Where a deceased spouse does not use all or part of their RNRB on their own death (e.g. because the home passes entirely to the surviving spouse under the spousal exemption), the unused RNRB is transferable to the surviving spouse's estate on the second death. The Transferable RNRB (TRNRB — up to £175,000) adds to the surviving spouse's own RNRB — potentially giving a combined RNRB of £350,000 on the second death. In second marriages: (1) If the first spouse (who dies) leaves the home to the surviving second spouse, the first spouse's RNRB is unused but 100% transferable to the second spouse. (2) On the second spouse's death, the second spouse has their own RNRB (£175,000) plus the TRNRB from the first spouse (£175,000) = £350,000 total RNRB — but only if the home passes to a direct descendant of the second spouse on the second death. (3) If the second spouse leaves the home to their own children (but not the first spouse's children), the combined RNRB of £350,000 is available on the second death only against bequests to the second spouse's direct descendants.
IPDI life interest trust: protecting children of the first marriage
The most common IHT and succession planning tool in second marriages is an Immediate Post-Death Interest (IPDI) life interest trust. Under this structure: (1) On the first spouse's death, the family home is placed into a trust — the surviving second spouse has the right to occupy (or receive income from) the property for life; (2) On the second spouse's death (or earlier if they choose to give up the life interest), the home passes to the first spouse's children — the intended ultimate beneficiaries. For IHT: (a) On the first death: the life interest is an IPDI under s49A IHTA 1984; the spousal exemption applies because the trust property is treated as owned by the surviving spouse (for IHT purposes the IPDI property is in the surviving spouse's estate, not the trust); (b) On the second death: the IPDI property is in the surviving spouse's IHT estate — RNRB may apply if the home passes to direct descendants of the surviving spouse or (where the IPDI was structured correctly) to direct descendants of the original deceased. Note: the RNRB on the IPDI property on the second death applies where the beneficiaries under the trust are direct descendants of the first spouse — the RNRB follows the property, not just the last person to have owned it.
RNRB where the estate is left to the surviving spouse first
A common will structure in second marriages: 'I leave everything to my wife; if she predeceases me, then to my children from my first marriage.' In this case: (1) On first death: the entire estate (including the family home) passes to the second wife under the spousal exemption — no IHT. (2) The first spouse's RNRB is unused — 100% transferable to the second wife's estate. (3) On the second wife's death: the second wife's estate (including the inherited home) is subject to IHT. The second wife's estate qualifies for her own RNRB (£175,000) plus the inherited TRNRB (£175,000) = £350,000 — but only if the home passes to her own direct descendants (not to the first wife's children). If the second wife leaves the home to the first husband's children (not her direct descendants), the RNRB is not available on that bequest. This is the most common second-marriage RNRB trap.
IPFDA 1975 claims in second marriages
The Inheritance (Provision for Family and Dependants) Act 1975 allows a surviving spouse to claim reasonable financial provision from the estate if not adequately provided for in the will. In second marriages, the competing claims are: (1) the surviving second spouse's IPFDA claim against the first spouse's estate (where the will leaves too much to children of the first marriage); (2) the children's IPFDA claim against the second spouse's estate (where the second spouse receives the whole estate and leaves nothing to the first spouse's children on their own death). To avoid IPFDA claims: the first spouse's will must make reasonable provision for the surviving second spouse AND ensure the first spouse's children are adequately protected. An IPDI life interest trust achieves this: the second spouse is provided for (life interest = reasonable provision); the first spouse's children receive the capital on the second death.
Practical will structures for second marriages
Three common approaches for second marriages: (1) Outright legacy to second spouse with letter of wishes: leave everything to the second spouse, trusting them to provide for the first spouse's children. High risk — no legal protection for the first spouse's children; the second spouse can change their own will at any time. (2) IPDI life interest trust: most protective — see above. Ensures second spouse is provided for and first spouse's children receive the capital. Most common professionally advised structure. (3) Trust for the second spouse with fixed share to children: leave a fixed percentage (e.g. 50%) to the second spouse and 50% to the first marriage children. Simpler but may not provide adequate income for the second spouse. In all cases, both spouses in a second marriage should make new wills that reflect the blended family circumstances — and both wills should be reviewed together to ensure they work harmoniously.
Frequently Asked Questions
Can my stepchildren claim the Residence Nil Rate Band?
No — stepchildren are not 'direct descendants' for RNRB purposes (s8K IHTA 1984) unless they have been legally adopted by you. If you leave your home to a stepchild (not adopted), the RNRB does not apply to that bequest. The home must pass to your own biological or adopted children or grandchildren for the RNRB to be available. If your only children are stepchildren, the RNRB may be entirely lost on your death. If you have both biological and step-children, the RNRB applies to the share passing to the biological/adopted children only.
What happens to the RNRB in a second marriage where I leave everything to my second wife?
If you leave everything (including the family home) to your second wife under the spousal exemption, your RNRB is unused — it is 100% transferable to your second wife's estate. On your second wife's death, she has her own RNRB (£175,000) plus your transferred RNRB (£175,000) = up to £350,000 RNRB in total. However, this combined RNRB is only available if the home passes from your second wife's estate to her own direct descendants (her biological or adopted children) — not to your children from the first marriage (unless they are also her biological children). If your second wife leaves the home to your children from your first marriage, the RNRB is lost.
What is an IPDI life interest trust and how does it work in a second marriage?
An IPDI (Immediate Post-Death Interest) life interest trust is a trust created in a will under which the surviving spouse has the right to occupy the family home (or receive income from other assets) for life. On the first spouse's death: the spousal exemption applies — the trust property is treated as the surviving spouse's for IHT; no IHT on first death. On the surviving spouse's death: the trust property forms part of their estate for IHT — the RNRB applies if the trust property then passes to qualifying direct descendants. The first spouse's children from the first marriage receive the home after the second spouse's death. This structure ensures: (1) the second spouse is provided for during their lifetime; (2) the first spouse's children ultimately receive the capital; (3) the RNRB is available on the second death.
Can my second wife's children claim my estate after I die?
Your second wife's children (who are your stepchildren) can make a claim under the Inheritance (Provision for Family and Dependants) Act 1975 if they were financially dependent on you at the time of your death. A child (including a stepchild) who was 'maintained' by the deceased immediately before death may claim reasonable financial provision. If your will makes no provision for financially dependent stepchildren, they may have an IPFDA claim. This is separate from the RNRB issue — it is a welfare claim, not an IHT planning point.
Do I need to update my will when I remarry?
Yes — urgently. Under English law, marriage revokes a previous will (s18 Wills Act 1837). If you remarried without making a new will, your previous will was automatically revoked by the marriage — you are now intestate. Under intestacy, the surviving spouse receives the first £322,000 (statutory legacy) plus half the remainder; the children from the first marriage receive the other half. If you remarried and have not made a new will, your children from the first marriage may receive very little — and neither the RNRB nor an IPDI trust structure applies. Making a new will immediately on or after remarriage is essential.
Remarrying? Make a New Will Immediately
Marriage revokes your previous will. Without a new will, your estate passes under intestacy — your second spouse may receive too much and your first family may receive too little. WillSafe will kits let you make a clear, legally compliant new will that works for your blended family.
View Will Kits from £39.99