This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

IHT Allowance

Posts: 11
Joined: Mon Apr 10, 2017 3:20 pm

IHT Allowance

Postby cliff99 » Sat Jan 04, 2020 6:42 pm

A very recently deceased spouse has left her estate to her husband. The husband would prefer his late wife’s estate to go to their children by executing a deed of variation in the children’s favour.

He has been informed that if he should do this, then he will lose his right to claim his late wife’s unused nil rate £325,000 IHT allowance on his own eventual demise.

Is the advice he has received correct, and if so is there any other way in which he can renounce this inheritance, yet preserve his eventual right to claim his spouse’s unused IHT allowance.

Posts: 225
Joined: Mon Aug 12, 2019 8:41 am
Location: Sandhurst, Berkshire

Re: IHT Allowance

Postby jerome.lane » Mon Jan 06, 2020 11:27 am

The advice is correct; if the wife's nil rate band is used up via a deed of variation, then there will be no transferable nil rate band on second death.
The gamble is whether a potentially exempt transfer of assets now by the widower would succeed and preserve the transferable nil rate band.
Depending on the assets involved and any potential reliefs, there could be other options although that is probably outside this platform.
Jerome Lane
Tax Adviser
Telephone: 07943 005902

Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”