Inheritance Tax When the Second Parent Dies

When the second parent in a married couple or civil partnership dies, HM Revenue and Customs assesses the whole estate for inheritance tax, and in many cases there is still nothing to pay. That is because assets passing between spouses on the first death are generally exempt, and the first parent's unused allowances can transfer to the survivor.

The result is that a couple can often pass on up to £1,000,000 before inheritance tax applies, made up of two nil-rate bands and two residence nil-rate bands where a home passes to children or grandchildren. This page explains how that works on the second death, walks through a worked example, and sets out how the transfer is claimed. Figures are current as at June 2026 and are subject to change. For the wider picture, see our Inheritance Tax explained guide and the pillar estate planning guide.

Why inheritance tax usually falls due on the second death

Most married couples and civil partners leave everything to each other on the first death, and transfers between spouses or civil partners are generally free of inheritance tax with no upper limit. So the first death often produces no tax bill at all. The estate is then assessed on the second death, when the assets pass to children or others, which is why the second parent's death is usually the point at which any inheritance tax is calculated (gov.uk/inheritance-tax, as at June 2026, subject to change).

The transferable nil-rate band explained

When the first parent dies leaving everything to the surviving spouse, they use little or none of their own nil-rate band. The unused percentage can then transfer to the survivor, so the second estate may have up to two full nil-rate bands available. The transfer is worked out as a percentage of the band that was unused, not a fixed sum, which matters because the band level may differ between the two deaths (gov.uk, transferring the unused threshold, as at June 2026, subject to change).

The same principle applies to the residence nil-rate band, the extra allowance available when a home passes to direct descendants. Any unused percentage of the first parent's residence band can also transfer to the survivor's estate. Because both bands transfer, the second estate can potentially draw on the full combined allowances of both parents.

The allowances that apply on the second death

Two tax-free bands can stack on the second death: the nil-rate band of £325,000 per person, and the residence nil-rate band of up to £175,000 per person where a home passes to children or grandchildren. Combined and doubled across a couple, these can reach up to £1,000,000. Anything above the available allowances is generally taxed at 40%.

Source: gov.uk/inheritance-tax and gov.uk, passing on a home. The nil-rate band, residence nil-rate band and taper threshold are frozen until the end of the 2030-31 tax year (5 April 2031) (gov.uk), as at June 2026, subject to change. See our Inheritance Tax thresholds and allowances 2026/27 for detail.

A worked example on the second death

The clearest way to see how the second death works is to run the numbers. The illustration below uses June 2026 figures and assumes the couple were married, left everything to each other on the first death, and leave the home to their children on the second. It is a general illustration, not a calculation for any particular family.

The transfer is not automatic in the sense of needing no action: the executors or administrators of the second estate make the claim, typically using form IHT402 with the fuller estate return, or as part of the probate application for many deaths. A claim is generally made within two years of the second death, and it can be worth confirming the current forms and deadlines on gov.uk (gov.uk, transferring the unused threshold, as at June 2026, subject to change). Because the paperwork depends on the first estate, keeping those records safe helps the family later.

What happens if the parents were not married

The spouse exemption and the transferable bands only apply to married couples and civil partners. Where parents were unmarried, there is no exemption on the first death and no transfer of unused allowances, so inheritance tax can arise on both deaths and each estate relies only on its own bands. This can leave an unmarried couple's children facing a larger combined bill than a married couple in the same financial position. Cohabiting partners in this position often choose to take advice on wills, ownership of the home and lifetime planning.

For married couples the second death is usually where the tax is worked out. For unmarried couples, tax can arise twice, because the exemption and the transfer do not apply.

Reducing the bill before the second death

Several routes may reduce what falls due on the second death, depending on circumstances. Leaving a home to children or grandchildren can preserve the residence bands, keeping the estate below the £2,000,000 taper threshold can protect them, and lifetime gifts, exemptions and charitable legacies may lower the taxable estate. None of these guarantees a particular outcome, and some carry their own conditions. Our guide on how to reduce Inheritance Tax legally covers the main options in more depth.

• Preserve the residence bands. Passing the home to direct descendants is what makes the residence nil-rate band available on each death.
• Watch the £2,000,000 taper. Once a couple's assets combine into one estate, the taper can erode the residence band.
• Lifetime giving. Gifts and available exemptions may reduce the taxable estate over time, subject to the rules on gifts.
• Charitable legacies. Leaving 10% or more of the net estate to charity can reduce the rate on the taxable part from 40% to 36%.

Scotland and Northern Ireland

Inheritance tax is a UK-wide tax, so the nil-rate band, residence nil-rate band and the transfer between spouses work the same across the UK. What differs is succession law. Scotland has its own rules, including legal rights that can entitle a spouse and children to a fixed share regardless of the will, and it uses confirmation rather than a grant of probate. Northern Ireland has a separate but broadly similar system to England and Wales. Where an estate crosses jurisdictions, it can be worth taking advice in each.

Frequently asked questions