Inheritance Tax for Unmarried Couples UK 2026: No Spousal Exemption, No Transferred Threshold, and What to Do
Cohabiting couples receive none of the IHT protections available to married couples. No spousal exemption. No £650k combined NRB. No £1m combined threshold. Every bequest over £325k is taxed at 40% — and without a will, the surviving partner inherits nothing at all.
Common Law Marriage Does Not Exist
There is no common law marriage in England and Wales. Living together for any number of years gives an unmarried partner no automatic IHT rights. Every unmarried couple should make wills immediately.
| IHT Benefit | Married / Civil Partner | Unmarried Cohabiting Partner | IHT Difference |
|---|---|---|---|
| Unlimited spousal/CP exemption on gifts and bequests | YES — s18 IHTA 1984. Unlimited transfers between UK-domiciled spouses or civil partners are completely exempt from IHT, both during lifetime and on death. A bequest of any amount from one spouse to the other: zero IHT. | NO — there is no equivalent exemption for unmarried partners. Every gift or bequest from one cohabiting partner to the other is treated as a transfer to any unconnected person: a PET (s3A IHTA) during lifetime (7yr clock; IHT if donor dies within 7yr above NRB); or a taxable bequest on death (subject to IHT at 40% on the amount above NRB). | A £500k bequest from one partner to another: married = £0 IHT; unmarried = £500k − £325k NRB = £175k × 40% = £70k IHT (if no other NRB is available). The partner must pay £70k IHT to inherit the bequest. |
| Transferable Nil-Rate Band (tNRB) — s8A IHTA 1984 | YES — on the death of the first spouse, ANY unused NRB is transferred to the surviving spouse's estate. If first spouse left everything to the survivor (100% unused NRB): second death estate gets tNRB of £325k PLUS own NRB of £325k = £650k combined NRB. tNRB claimed on IHT402 (not automatic; must be filed by executor of second estate). | NO — the tNRB is only available to surviving spouses or civil partners (s8A IHTA). An unmarried surviving partner receives ZERO transferable NRB from the deceased partner's estate. The surviving partner's estate has ONLY their own NRB (£325k). | A couple each with £500k in assets, total estate £1m. Married (second death): £1m − £650k (NRB + tNRB) − £175k RNRB − £175k tRNRB = £0 IHT. Unmarried (second partner's estate = £1m): £1m − £325k NRB − £175k RNRB = £500k × 40% = £200k IHT. No tNRB = £200k more IHT on the same wealth. |
| Transferable Residence Nil-Rate Band (tRNRB) — s8G IHTA 1984 | YES — if the first spouse did not use their RNRB (or used it only partially), the unused fraction is transferred to the second estate. Full tRNRB = £175k. Second death estate with full tRNRB + RNRB = £350k from residential threshold alone. Claimed on IHT436 (not automatic; must be filed by executor of second estate). | NO — the tRNRB (s8G IHTA) is only available to surviving spouses or civil partners. An unmarried surviving partner cannot claim the deceased partner's unused RNRB. | Combined residential threshold for married couple: RNRB £175k + tRNRB £175k = £350k. For unmarried: RNRB £175k only (if qualifying conditions met) = £175k. Difference: £175k × 40% = £70k more IHT. Combined with the tNRB loss: unmarried couples can face up to £200k more IHT on a £1m estate compared to a married couple with the same assets. |
| Total combined IHT threshold available | £1,000,000: NRB £325k + tNRB £325k + RNRB £175k + tRNRB £175k. Requires: qualifying residential property passing to lineal descendants; tNRB claimed on IHT402; tRNRB claimed on IHT436; both thresholds not automatic. | £500,000 maximum: NRB £325k + RNRB £175k (if qualifying residential property passes to lineal descendants). No tNRB; no tRNRB; no spousal exemption on lifetime transfers or bequests. Even if the first partner's assets are left to the surviving partner by will — the legacy is subject to IHT above the £325k NRB. | On a £1m combined estate: married = up to £0 IHT; unmarried = up to £200k IHT. On a £2m combined estate: married = up to £400k IHT; unmarried = up to £700k IHT. The IHT gap between married and unmarried grows with wealth. |
| Intestacy — what happens without a will | Spouse/CP: inherits the entire estate where estate < £322,000; or statutory legacy (£322,000 in 2026 — SI 2023/1331) plus half of the residue if estate > that amount, with children taking the other half. Spouse/CP is always the first beneficiary under intestacy (Administration of Estates Act 1925 s46). | NOTHING. An unmarried partner receives nothing under intestacy (Administration of Estates Act 1925 s46) regardless of the length of the relationship, whether they share a home, or whether they have children together. The estate passes to children; then parents; then siblings — never to an unmarried partner. Inheritance (Provision for Family and Dependants) Act 1975 s1(1)(ba): a cohabiting partner who lived with the deceased for at least 2 years can apply to court — but this is a court application, not an automatic right; contested; expensive; uncertain outcome. | Without a will: the surviving unmarried partner can be left with nothing from the estate — and may face IHT on any eventual inheritance if they do receive something via court order (IA 1975 — s19 read-back for IHT purposes, but the process is costly and uncertain). |
| Jointly owned property — IHT treatment | Joint tenancy (JT): property passes automatically by survivorship (right of survivorship) to the surviving spouse/CP. The deceased's share is NOT in their estate for IHT (it never passes through the estate). No IHT on the JT share. Tenancy in common (TIC): the deceased's share IS in the estate; passes under will or intestacy; subject to IHT; co-ownership discount (HMRC IHTM09733) of 10-15% may apply. | SAME property rules apply. JT: the surviving unmarried partner inherits by survivorship; NOT in the estate for IHT. The 'benefit' of JT survivorship is available to unmarried couples on the same terms. TIC: the deceased's share is in the estate; passes under will (or intestacy — but without a will, intestacy excludes the partner); subject to IHT above NRB. For unmarried couples: JT ownership of the home is common and provides survivorship automatically, but does not give the partner any IHT exemption (the JT survivorship replaces the will, not the spousal exemption). | JT survivorship avoids IHT on the property share passing to the surviving partner ONLY because the property never enters the estate (survivorship is not a transfer — it is a feature of legal title). But the surviving partner's overall estate will be larger as a result, and their own eventual estate faces IHT with only a £500k combined threshold. |
IHT unmarried couples UK 2026. Spousal exemption: s18 IHTA 1984 — unlimited; married/CP only; NOT available to cohabiting partners. tNRB: s8A IHTA — transferred nil-rate band from first spouse; IHT402; NOT automatic; married/CP only. tRNRB: s8G IHTA — transferred RNRB from first spouse; IHT436; NOT automatic; married/CP only. NRB: £325,000 (s8C IHTA — frozen to April 2030). RNRB: £175,000 (s8D IHTA — qualifying residential property to s8K IHTA lineal descendants). Combined threshold married: £1,000,000 max. Combined threshold unmarried: £500,000 max. Common law marriage: does not exist in England and Wales (Law Commission 2002). Intestacy: Administration of Estates Act 1925 s46 — unmarried partner receives nothing. IA 1975 s1(1)(ba): cohabiting partner (2yr+) can apply to court for financial provision — not automatic; contested. Scotland: Family Law (Scotland) Act 2006 s29 — limited cohabitation rights on death (court application required). JT survivorship: property passes to surviving partner outside estate and outside will; NOT in estate for IHT at first death. TIC: deceased's share in estate; co-ownership discount HMRC IHTM09733 10-15%. PET: s3A IHTA — lifetime gifts between partners; 7yr clock; taper s7(4) years 3-7. Annual exemption: s19 IHTA — £3k/yr; carry-forward s19(2) one year only. Normal expenditure from income: s21 IHTA — uncapped; surplus income; established pattern. Life insurance in trust: payout outside estate; no IHT on policy proceeds. Marriage revokes will: s18 Wills Act 1837 — make a new will after marrying. Civil Partnership Act 2004: CP = same IHT rights as marriage.
IHT for Unmarried Couples: Complete Guide
The common law marriage myth — why living together gives no IHT protection
Many cohabiting couples believe that after a number of years living together, they acquire the same legal rights as married couples — often called 'common law marriage'. This is a myth. There is no such thing as common law marriage in England and Wales (Law Commission Report 2002; 'Cohabitation: The Financial Consequences of Relationship Breakdown' — Law Commission 2007). Living together for any period — whether 2 years or 40 years — gives an unmarried partner NO automatic IHT exemptions. HMRC confirms this: for IHT purposes, the only relationships that qualify for the spousal exemption (s18 IHTA 1984) are marriage and civil partnership. Cohabiting partners are treated as unconnected individuals for IHT — the same as two strangers. Scotland: the Family Law (Scotland) Act 2006 gives cohabiting partners limited financial rights on death (section 29 — surviving cohabitant's financial provision). However, even in Scotland, these are not automatic rights — a court application is required — and the IHT treatment is the same as for England and Wales: no spousal exemption, no tNRB, no tRNRB. The only way to access the full IHT benefits of marriage or civil partnership is to formalise the relationship. From an IHT perspective, this can be worth hundreds of thousands of pounds for couples with larger estates.
What unmarried couples should do to protect each other — practical steps
While an unmarried couple cannot access the s18 spousal exemption or the transferable thresholds (tNRB/tRNRB), there are several important steps they should take: (1) MAKE WILLS (urgently): without a will, intestacy gives the surviving partner nothing. A will allows each partner to leave assets to the other, subject to IHT above the NRB (£325k). The will should also consider leaving the residential property to children/lineal descendants to qualify for the RNRB (s8H-8K IHTA) — an unmarried surviving partner who receives the property does not trigger the RNRB (the RNRB requires the property to pass to lineal descendants). (2) Life insurance written in trust: a term or whole-of-life policy written in a discretionary or life-of-another trust pays out outside the estate to the surviving partner — providing funds to meet IHT bills, cover the period before assets can be sold, or simply provide financial security. The policy premium is not an estate asset; the payout goes directly to the surviving partner. (3) Lifetime gifts (PETs — s3A IHTA): gifts between unmarried partners start the 7-year clock. If the donor partner survives 7 years, the gift is fully exempt. Using the annual exemption (s19 IHTA — £3,000 per year) and normal expenditure from income (s21 IHTA — uncapped surplus income) to regularly transfer assets between partners reduces the estate over time. (4) Register the relationship: marriage or civil partnership immediately and permanently confers the unlimited s18 IHTA exemption and the rights to tNRB (IHT402) and tRNRB (IHT436) on the second death. The IHT saving over a lifetime of cohabitation can easily exceed £200k for couples with combined assets of £1m+. (5) Pension nominations: unmarried partners can be nominated as pension beneficiaries (pre-April 2027). After April 2027 DC pensions are in the IHT estate — but the nomination still determines who receives the pension.
IHT on bequests to an unmarried partner — how the numbers work
When one partner dies and leaves assets to the other under their will, those assets are fully subject to IHT above the deceased's available NRB (£325k). Unlike spousal bequests (which are exempt under s18 IHTA regardless of amount), a bequest to an unmarried partner is treated as a bequest to any other individual. Example: partner A dies with an estate of £700k and leaves everything to partner B. NRB: £325k. Chargeable estate: £700k - £325k = £375k. IHT: £375k × 40% = £150k. Partner B must pay £150k IHT before receiving the bequest — typically funded from the estate itself (the estate of £700k produces £550k for partner B after IHT of £150k). If partner A had also made PETs in the 7 years before death, those reduce the NRB available for the estate (making the IHT higher). If partner A was married to partner B: £0 IHT. The same £700k passes to partner B with zero IHT. On partner B's eventual death: tNRB (£325k from partner A) + own NRB (£325k) = £650k available. The stark comparison: unmarried = partner B receives £550k; married = partner B receives £700k (and a £650k combined threshold on their own death). The difference on this example alone: £150k lost to IHT plus the additional IHT exposure on partner B's later estate.
Joint tenancy vs tenancy in common for unmarried couples
Jointly owned property can be held either as Joint Tenants (JT) or Tenants in Common (TIC) — and the choice has IHT implications for unmarried couples. Joint tenancy: the right of survivorship means that when one joint tenant dies, their share automatically passes to the surviving joint tenant by operation of law (not through the will or intestacy). The deceased partner's share does not enter the estate — it simply ceases to belong to the deceased and becomes the sole property of the survivor. For IHT: the JT share is NOT included in the deceased's estate (it never passes — it simply accrues to the survivor). This is one of the few IHT-efficient mechanisms available to unmarried couples on property. Tenancy in common: each partner owns a defined share (e.g., 50% each). On death, the deceased partner's 50% share IS in their estate and passes under their will (or intestacy). If the TIC share is left to the surviving partner by will, it is subject to IHT above the NRB. Co-ownership discount: HMRC IHTM09733 allows a 10-15% discount on the arithmetic value of a TIC share (because a buyer of an undivided share cannot force a sale without a court order under s14 ToLATA 1996). For unmarried couples who own their home: JT ownership provides automatic survivorship and avoids IHT on that initial passing, but does not reduce the surviving partner's eventual estate. TIC ownership allows each partner to leave their share to children (securing the RNRB — s8H-8K IHTA), but means the share passes through the will/intestacy, and an unmarried surviving partner may face IHT on it. Strategy: for couples with children who want to secure the RNRB on each death, TIC ownership with wills leaving the TIC share to children may be more IHT-efficient despite the TIC share being in the estate — because the children's inheritance secures the RNRB.
Registering the relationship — the IHT case for marriage or civil partnership
From an IHT perspective, registering a relationship through marriage or civil partnership immediately and permanently grants the couple access to the most valuable IHT exemptions in UK law. The s18 IHTA unlimited spousal exemption applies from the date of the marriage or civil partnership — any assets transferred between the parties from that date (during life or on death) are fully exempt. The tNRB (s8A IHTA) and tRNRB (s8G IHTA) both become available on the second death — bringing the combined threshold to £1m for a couple with qualifying residential property and children. The total IHT saving over a lifetime of joint assets versus the same assets held as unmarried cohabitants can easily be £200k-£500k for couples with estates in the £1m-£2m range. One note for planning: marriage revokes any existing will (s18 Wills Act 1837). Anyone who marries must make a new will immediately after the marriage — both to ensure the estate passes as intended, and to specify the distribution of assets to maximise the tNRB, tRNRB, and RNRB on the second death. A marriage without a new will leaves the estate to intestacy rules after the marriage — which may not achieve the IHT-optimal result.
Frequently Asked Questions
Do unmarried couples pay inheritance tax?
Yes — unmarried couples have no IHT exemption on transfers between them. Every bequest or gift from one unmarried (cohabiting) partner to the other is fully subject to IHT above the available NRB (£325k). There is no 'spousal exemption' (s18 IHTA) for unmarried partners. There is no transferable NRB (tNRB — s8A IHTA) from the first partner's death to the second. There is no transferable RNRB (tRNRB — s8G IHTA). The combined IHT threshold for an unmarried couple is only £500k maximum (NRB £325k + RNRB £175k each) — compared to £1m for a married couple. A bequest of £700k from one unmarried partner to another: IHT = (£700k - £325k) × 40% = £150k. The same bequest between married spouses: £0 IHT.
Is there such a thing as common law marriage for inheritance tax?
No — common law marriage does not exist in England and Wales. Living together for any number of years does not create the same IHT rights as marriage or civil partnership. The Law Commission confirmed this (2002; 2007). HMRC treats cohabiting partners as unconnected individuals for IHT — the same as strangers. The s18 IHTA spousal exemption applies only to spouses and civil partners, not to cohabiting partners regardless of the length or nature of the relationship. This is not just an IHT issue — unmarried partners have no automatic right to inherit from each other (intestacy gives them nothing under the Administration of Estates Act 1925). Scotland: the Family Law (Scotland) Act 2006 s29 gives cohabiting partners limited financial rights on death, but these are not automatic — a court application is required — and the IHT position is unchanged: no spousal exemption, no tNRB, no tRNRB.
How can unmarried couples reduce inheritance tax?
Unmarried couples cannot access the spousal IHT exemptions, but they can reduce IHT exposure through: (1) Wills: leave assets to maximise the RNRB (residential property to children rather than to the surviving partner — the partner receives the home via JT survivorship); (2) Life insurance in trust: write a policy in a life-of-another or discretionary trust to provide a lump sum to the surviving partner outside the estate, meeting IHT bills; (3) Annual exemption (s19 IHTA): £3,000 per donor per year; immediately exempt; no 7-year clock; (4) Normal expenditure from income (s21 IHTA): regular gifts from surplus income; uncapped; immediately exempt; established pattern required; (5) PETs (s3A IHTA): lifetime gifts between partners start a 7-year clock; exempt if donor survives 7 years; (6) Joint tenancy for the home: ensures the property passes by survivorship without probate (though not IHT-exempt if the estate is above the NRB — the surviving partner's own estate grows); (7) Register the relationship: marriage or civil partnership immediately grants the full s18 spousal exemption and both tNRB and tRNRB on the second death.
What happens to an unmarried partner's estate if there is no will?
If a person dies without a will (intestate), the surviving unmarried partner receives NOTHING under the Administration of Estates Act 1925 (s46). Intestacy in England and Wales distributes the estate in this order: (1) Spouse or civil partner; (2) Children (if no spouse) or spouse takes statutory legacy + half residue if there are children; (3) Parents; (4) Siblings; (5) More distant relatives. An unmarried partner — regardless of how many years they have lived together — receives nothing automatically under intestacy. They may apply to court under the Inheritance (Provision for Family and Dependants) Act 1975 s1(1)(ba) as a cohabiting partner of at least 2 years for financial provision from the estate — but this is a contested court application, not a guaranteed right. Without a will, the surviving partner may lose the family home, savings, and any financial security — even after decades of cohabitation. Every unmarried couple must make wills to protect each other.
Does joint ownership of property help unmarried couples with IHT?
Joint tenancy (JT) ownership ensures the property automatically passes to the surviving partner by survivorship — without going through the will or intestacy. The deceased partner's share does NOT enter the estate (it never passes through the estate — it simply ceases to belong to them). This avoids IHT on the property at the first death: no IHT on the JT share. However: the surviving partner's own estate grows (they now own 100% of the property), and when they die, their estate faces IHT with only a £500k threshold (not £1m). JT ownership is useful for: ensuring the surviving partner keeps the home regardless of the will; avoiding probate on the property. It does NOT substitute for the spousal exemption. Tenancy in common (TIC): the deceased's share IS in the estate; passes under will (or intestacy). Leaving the TIC share to children (not the surviving partner) secures the RNRB (s8H-8K IHTA) on each death — potentially more IHT-efficient for couples with children, even though the surviving partner does not directly inherit the share.
Unmarried Couples Must Have Wills — There Is No Safety Net Without One
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