Remarriage and Inheritance Tax
How second marriages affect inheritance tax planning and allowance transfers
Remarriage and Inheritance Tax (IHT) — the essentials
- • Transfers to a spouse/civil partner are generally exempt from IHT (special limits may apply if the recipient is not UK-domiciled).
- • Remarrying does not cancel your ability to claim transferable allowances from a predeceased spouse/civil partner.
- • On the last death, executors can claim any unused nil rate band (NRB) and unused residence nil rate band (RNRB) percentages from one or more predeceased spouses — but in each case the combined transferred percentage cannot exceed 100%.
How Remarriage Affects Inheritance Tax
Remarriage creates new inheritance tax relationships and can significantly impact your estate planning. Your new spouse immediately gains the same tax advantages as your first spouse, but this can create complications for children from previous relationships.
- • Unlimited inheritance tax exemption on transfers
- • Can inherit unused nil rate band allowances
- • Eligible for residence nil rate band transfers
- • No seven-year rule on gifts between spouses
- • Children's inheritance may be delayed or reduced
- • Previous nil rate band transfers remain with first spouse
- • Residence allowance may not benefit your children
- • Blended family dynamics require careful planning
Transferable Nil Rate Band (TNRB) after remarriage
When the survivor dies, their executors can claim the unused NRB percentage from previous spouse(s) to increase the survivor's NRB at that time.
Multiple predeceased spouses
If someone was widowed more than once, percentages can be aggregated from multiple predeceased spouses, but the total transferred NRB is capped at 100%.
Evidence requirements
Keep evidence from each earlier estate (date of death, probate/confirmation papers, how much of the NRB was used).
RNRB and remarriage
The Residence Nil Rate Band (RNRB) only applies if a qualifying home (or downsizing equivalent) passes to direct descendants.
Leaving the home to a new spouse usually means no RNRB on that first death; it is typically used (and can be transferred) on the second death if conditions are met.
As with NRB, transferable RNRB can be claimed from one or more earlier spouses, but the combined transferred RNRB cannot exceed 100%.
Remember the £2m taper: RNRB reduces by £1 for every £2 the estate exceeds £2,000,000.
Transferring Allowances After Remarriage
When you remarry, your new spouse can potentially inherit unused allowances from both you and your previous spouse, but the rules are complex and depend on the specific circumstances.
From Previous Marriage
If your first spouse died without using their full nil rate band, you may have already claimed their unused allowance. This transferred allowance remains available to you.
To New Spouse
When you die, your new spouse can inherit any unused allowances you have, including those transferred from your first spouse. However, they cannot inherit more than 100% of the current nil rate band from any one source.
Wills after remarriage
Marriage or civil partnership can affect the validity of existing wills, and the rules differ between jurisdictions.
England & Wales
Marriage/civil partnership generally revokes a will unless it was made in contemplation of that marriage. Update your will after remarrying.
Scotland
Marriage does not automatically revoke a will, but legal rights allow a spouse/children to claim from the moveable estate, which can alter distributions (and the IHT calculation).
RNRB coordination
Coordinate your RNRB objectives (passing a home to direct descendants) with will structure (e.g., tenants in common vs joint tenancy, life interest/IPP/NRB trusts where appropriate).
Protecting Children's Inheritance
One of the biggest concerns in remarriage is ensuring children from previous relationships receive their intended inheritance. Without proper planning, everything could pass to the new spouse, potentially disinheriting your children.
1. Will-Based Solutions
- • Leave specific assets or amounts to children
- • Create life interest trusts for your spouse
- • Use discretionary trusts for flexible distribution
2. Lifetime Gifts
- • Make potentially exempt transfers to children
- • Use annual gift allowances effectively
- • Consider gifts with reservation rules
3. Trust Arrangements
- • Set up trusts before remarriage
- • Use pilot trusts for future flexibility
- • Consider family protection trusts
Residence Nil Rate Band Complications
The residence nil rate band requires leaving your home to direct descendants. In remarriage situations, this can create conflicts between providing for your new spouse and qualifying for the additional allowance.
Quick scenarios
Result: No IHT due (spouse exemption). RNRB not used yet; TNRB/TRNRB potentially available on the second death.
Result: May use RNRB (subject to conditions) and still pass unused NRB to the surviving spouse.
Result: On the final death, executors may combine unused NRB percentages from both former spouses up to a 100% cap (same cap principle for RNRB).
Practical Planning Steps
Successful inheritance tax planning for remarried couples requires balancing multiple interests and considering various scenarios. Here's a structured approach to planning.
- • Discuss intentions with all family members
- • Consider family dynamics and relationships
- • Address concerns about fairness
- • Document agreements where appropriate
- • Consult specialist inheritance tax advisers
- • Consider family mediation if needed
- • Review arrangements regularly
- • Update wills after major life changes
What to organise if you've remarried
Will update
Ensure it matches your intentions (and RNRB conditions).
Title review
Decide between joint tenancy (survivorship) and tenants in common (can direct a share by will).
Evidence pack
Earlier spouse's death certificate, probate/confirmation documents, and NRB/RNRB usage calculations.
Gifts record
Keep year-by-year gift records (annual £3,000, £250 small gifts, wedding gifts, gifts out of income).
Estate map
Watch the £2m RNRB taper threshold and consider steps that keep the estate at or below it where sensible.
Common Scenarios and Solutions
Sarah inherited her late husband's unused nil rate band (£325,000). She remarries Tom, who has adult children from his first marriage.
Planning Solution:
- • Sarah keeps the transferred allowance from her first husband
- • Creates will leaving specific amounts to her children
- • Remainder to Tom, who can then provide for his children
- • Consider mutual wills to protect both sets of children
Mark and Lisa both have children from previous marriages and own a £800,000 family home together.
Planning Solution:
- • Joint ownership as tenants in common (not joint tenants)
- • Each leaves their share to their own children
- • Life interest for surviving spouse to remain in property
- • Separate wills addressing individual circumstances