Inheritance Tax: Second Parent Dies

When the second parent dies, inheritance tax is charged at 40% on the value of their estate above the available tax-free thresholds. For most married couples and civil partners the survivor also inherits the first parent's unused allowances, so the combined tax-free amount on the second death can reach up to £1,000,000 where a home passes to children or grandchildren (gov.uk/inheritance-tax, as at August 2026, subject to change).

This is why the second death, rather than the first, is usually the point at which a family faces an inheritance tax bill. The sections below explain how the allowances transfer, how the £2 million taper can reduce them, and what the people dealing with the estate need to do. Figures are current as at August 2026 and are subject to change. This is general information for England and Wales, not advice about any particular estate.

Why inheritance tax usually falls on the second death

Assets passing between spouses or civil partners are generally exempt from inheritance tax, so when the first parent dies and leaves everything to the survivor, there is normally no tax to pay at that point (gov.uk/inheritance-tax, as at August 2026, subject to change). The estate is not taxed, but it is also not using up the first parent's tax-free allowances in the usual way.

Instead, the allowances that were not used on the first death can be carried forward and claimed against the survivor's estate. The result is that a couple's combined estate is often measured against a doubled set of thresholds on the second death, which is when the calculation, and any bill, tends to arise.

The allowances that transfer to the survivor

Two separate allowances can pass from the first parent to the survivor. The proportion left unused on the first death is what transfers, expressed as a percentage rather than a fixed sum, so it keeps its value even though the bands themselves are frozen.

Transferable nil-rate band. The standard nil-rate band is £325,000 per person. Where none of it was used on the first death, the whole of it can transfer, giving the survivor's estate up to £650,000 (gov.uk/inheritance-tax, as at August 2026, subject to change).
Transferable residence nil-rate band. A further allowance of up to £175,000 per person can apply where a home is left to direct descendants such as children, stepchildren or grandchildren. This can also transfer, adding up to a further £350,000 (gov.uk, passing on your home, as at August 2026, subject to change).

Combined, a couple who leave a qualifying home to direct descendants may pass on up to £1,000,000 before inheritance tax applies on the second death. The transferred amounts are not automatic. The people administering the second estate have to claim them, using the appropriate HMRC forms described further down this page.

Allowance or rate	Per person	Couple, on the second death
Nil-rate band	£325,000	Up to £650,000
Residence nil-rate band (home to descendants)	Up to £175,000	Up to £350,000
Combined tax-free amount	Up to £500,000	Up to £1,000,000
Standard inheritance tax rate	40% on value above the threshold
Reduced rate (10% or more of the net estate to charity)	36%

Source: gov.uk/inheritance-tax and gov.uk, passing on your home. Figures as at August 2026 and subject to change. The nil-rate band, residence nil-rate band and £2 million taper threshold are frozen until 5 April 2031 (House of Commons Library, as at August 2026, subject to change).

How the £2 million taper can reduce the residence allowance

The residence nil-rate band is not available in full to every estate. It is withdrawn by £1 for every £2 by which the estate is worth more than £2,000,000, so larger estates lose part or all of it (gov.uk, passing on your home, as at August 2026, subject to change). On a second death where the couple's home and other assets have grown, this taper can quietly remove an allowance the family assumed was there.

The standard nil-rate band is not affected by the taper. Only the residence element is reduced, which means an estate above £2 million on the second death may still have two nil-rate bands of £325,000 available, but a smaller residence allowance, or none.

A worked example

Illustration only. A widowed mother dies leaving a home worth £450,000 and other assets of £350,000, so £800,000 in total. Her late husband left everything to her and used none of his allowances. On her death her estate may claim his transferred nil-rate band as well as her own, giving £650,000, and, because the home passes to their children, up to two residence nil-rate bands of £175,000 each. In this illustration the combined thresholds of up to £1,000,000 exceed the £800,000 estate, so no inheritance tax arises. Change the numbers, add lifetime gifts, or push the estate above £2,000,000, and the position changes. Every estate is different, and this is general information rather than a calculation for any particular family (gov.uk/inheritance-tax, as at August 2026, subject to change).

The first death often passes tax free between spouses. The second death is where the allowances, the taper and the family home meet.

What the executors need to do

On the second death, the people named as executors, or the administrators if there is no will, are responsible for valuing the estate, reporting it, claiming the transferred allowances and paying any tax due before the estate is distributed. Claiming the first parent's unused bands is a step that has to be made actively, and it is worth keeping the documents from the first death, such as the will, the grant and the death certificate, because HMRC may ask for them.

Step	Detail	Source
Value the estate	Work out the value of property, money and possessions at the date of death.	gov.uk, valuing the estate, Aug 2026, subject to change
Claim transferred allowances	Form IHT402 transfers the unused nil-rate band; form IHT436 transfers the unused residence nil-rate band.	gov.uk, inheritance tax forms, Aug 2026, subject to change
Pay any inheritance tax	Due by the end of the sixth month after the month of death; HMRC charges interest after that.	gov.uk, paying inheritance tax, Aug 2026, subject to change
Apply for probate	Application fee £526 where the estate is over £5,000; no fee at £5,000 or less.	gov.uk, probate fees, Aug 2026, subject to change

Inheritance tax generally has to be paid before probate is granted, which can create a timing problem when most of the estate is tied up in a house. HMRC allows the tax on some assets, including property, to be paid in instalments over up to ten years, though interest applies (gov.uk, paying inheritance tax, as at August 2026, subject to change). Our guide to what probate involves sets out the wider process.

Two changes worth knowing about

Two announced reforms could affect the tax due on a second death in the years ahead. Both are treated here as future changes with their start dates.

Pensions within the estate from 6 April 2027. Most unused pension funds and death benefits are due to be brought within the value of the estate for inheritance tax from that date, which could increase the taxable estate on a second death where a parent leaves an unused pension (gov.uk, technical note, as at August 2026, subject to change).
Business and agricultural property relief from 6 April 2026. Where a parent held a farm or a business, 100% relief applies to the first £2,500,000 of combined qualifying agricultural and business property per person, with 50% relief above that. The £2,500,000 allowance can transfer between spouses and civil partners (gov.uk, as at August 2026, subject to change).

Because the thresholds are frozen while many estates keep rising in value, more families are expected to come within inheritance tax over time. Our broader inheritance tax guide explains the allowances and reliefs in more detail, and estate planning looks at how a will, trusts and lifetime gifts can fit together.

Scotland and Northern Ireland

Inheritance tax is a UK-wide tax, so the thresholds, the 40% rate and the transferable allowances apply across Scotland and Northern Ireland in the same way. The surrounding process differs. Scotland uses confirmation rather than a grant of probate and has its own succession law, including legal rights that can give a spouse and children a fixed share of an estate. Northern Ireland has a separate but broadly similar system to England and Wales. Where an estate touches more than one jurisdiction, it can be worth taking advice in each.

Key facts (England and Wales, as at August 2026, subject to change).

Standard inheritance tax rate: 40% on value above the threshold (gov.uk).
Nil-rate band: £325,000 per person, up to £650,000 for a couple on the second death (gov.uk).
Residence nil-rate band: up to £175,000 per person where a home passes to direct descendants, up to £350,000 for a couple (gov.uk).
Combined tax-free amount on the second death: up to £1,000,000 (gov.uk).
Taper: residence allowance withdrawn by £1 for every £2 the estate exceeds £2,000,000 (gov.uk).
Payment deadline: end of the sixth month after the month of death (gov.uk).

Frequently asked questions

Do you pay inheritance tax when the second parent dies?

Sometimes. Inheritance tax is charged at 40% only on the part of the second parent's estate above the available thresholds. Where the estate falls within the combined nil-rate bands, which can reach up to £1,000,000 for a couple leaving a home to direct descendants, there may be no tax to pay. Figures are as at August 2026 and subject to change (gov.uk/inheritance-tax).

Why is there usually no inheritance tax on the first parent's death?

Assets passing between spouses or civil partners are generally exempt, so when the first parent leaves everything to the survivor there is normally no tax at that stage. The unused allowances are carried forward to the survivor's estate, which is why the calculation tends to arise on the second death. As at August 2026, subject to change (gov.uk/inheritance-tax).

How much can a couple leave before inheritance tax on the second death?

A married couple or civil partners may be able to pass on up to £1,000,000 free of inheritance tax on the second death, by combining two nil-rate bands of £325,000 and two residence nil-rate bands of up to £175,000 where a qualifying home passes to direct descendants. The residence element tapers above a £2,000,000 estate. As at August 2026, subject to change (gov.uk, passing on your home).

Who pays the inheritance tax when the second parent dies?

The executors named in the will, or the administrators where there is no will, are responsible for reporting the estate and paying any inheritance tax from the estate's assets before it is distributed to the beneficiaries. As at August 2026, subject to change (gov.uk, valuing the estate).

When does the inheritance tax have to be paid?

Inheritance tax is due by the end of the sixth month after the month in which the person died, and HMRC charges interest on anything paid after that date. Tax on some assets, including property, can be paid in instalments over up to ten years, with interest. As at August 2026, subject to change (gov.uk, paying inheritance tax).

How do you claim the first parent's unused allowances?

The transferred allowances are not applied automatically. The executors claim the unused nil-rate band on form IHT402 and the unused residence nil-rate band on form IHT436, submitted with the inheritance tax account. Keeping the first parent's will, grant and death certificate helps support the claim. As at August 2026, subject to change (gov.uk, inheritance tax forms).

Does gifting before the second death reduce the tax?

Gifts made by the second parent in the seven years before death can still count towards the estate for inheritance tax, though several exemptions exist, including a £3,000 annual exemption. Taper relief may reduce the tax on gifts made three to seven years before death, and it reduces the tax rather than the value of the gift. As at August 2026, subject to change (gov.uk, rules on giving gifts).

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Figures and rules are current as at August 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider individual circumstances.

Inheritance Tax When the Second Parent Dies