For most married couples and civil partners, no inheritance tax is due when the first parent dies. The bill, if there is one, usually falls when the second parent dies and the estate passes to the children. Two allowances move across to the survivor, a couple can often pass up to £1,000,000 tax free, and one claim families most often miss decides whether tax is paid. Figures are current as at August 2026, subject to change.
Do you pay inheritance tax when the second parent dies?
Whether any tax is actually due comes down to two figures: the value of the second parent's estate, and the total allowances their executors can apply. On the second death the estate usually passes to children rather than a spouse, so the spouse exemption no longer helps and HMRC assesses the whole estate. Larger estates, and those without a qualifying home, can face a bill; our wider inheritance tax guide covers the mechanics.
Why is there usually no inheritance tax when the first parent dies?
The spouse exemption removes inheritance tax on transfers between married couples and civil partners, in life or on death. When the first parent leaves their estate to the surviving parent, none of that transfer is taxed, and none of the first parent's own allowances need to be used against it.
Because those allowances are left unused, they are not lost: they transfer to the surviving parent for use on the second death. The exemption applies to married couples and civil partners only; unmarried partners do not qualify, a point that catches many long-term couples out.
What allowances transfer to the surviving parent's estate?
The nil-rate band is the standard tax-free threshold every estate has, set at £325,000. The residence nil-rate band is an extra allowance of up to £175,000 that applies only when a home, or a share of one, passes to direct descendants: children, stepchildren, adopted children or grandchildren.
Where the first parent left everything to the survivor and used neither allowance, 100% of both transfers across. The key detail is that the transfer is recorded as a percentage of the unused band, not a cash figure, and that percentage is applied to the allowance in force at the second death (gov.uk, residence nil-rate band, as at August 2026, subject to change).
| Allowance | Per person | Couple combined (100% transferred) |
|---|---|---|
| Nil-rate band | £325,000 | £650,000 |
| Residence nil-rate band (home to descendants) | Up to £175,000 | Up to £350,000 |
| Maximum combined threshold | Up to £500,000 | Up to £1,000,000 |
| Rate above the allowances | 40% (36% where 10% or more of the net estate passes to charity) | |
Source: gov.uk/inheritance-tax and gov.uk residence nil-rate band guidance. As announced at Budget 2025 on 26 November 2025, the nil-rate band, residence nil-rate band and £2,000,000 taper threshold are frozen until 5 April 2031, the end of the 2030-31 tax year (gov.uk, Budget 2025, as at August 2026, subject to change).
How much can a couple leave before inheritance tax on the second death?
The £1,000,000 figure applies only where a qualifying home passes to descendants and the estate is under the £2,000,000 taper threshold covered below. Without a qualifying home, the ceiling is the two nil-rate bands, up to £650,000.
Worked example: an £900,000 estate, no tax
James dies first and leaves everything to his wife, Margaret: the spouse exemption means no tax and none of his allowances are used. Margaret dies later, leaving a £900,000 estate that includes the family home, which passes to their two children.
Margaret's executors apply her own nil-rate band of £325,000 plus James's transferred £325,000, giving £650,000. They also apply her £175,000 residence allowance plus James's transferred £175,000, giving £350,000. The combined allowance is £1,000,000.
Because the £900,000 estate is below the £1,000,000 combined allowance, the inheritance tax due is £0. If the estate had been £1,200,000, tax would apply to the £200,000 above the threshold at 40%, a bill of £80,000.
How does the £2 million taper reduce the residence allowance?
The taper is measured against the second parent's estate, before reliefs but after debts. A couple's combined £350,000 residence allowance is withdrawn entirely once the estate reaches £2,700,000. The two nil-rate bands are not tapered, so £650,000 always remains.
The effect is easy to underestimate. On a £2,300,000 estate, £300,000 over the threshold, the combined residence allowance is cut by £150,000 to £200,000. With the two nil-rate bands of £650,000, the total allowance is £850,000, so tax falls on £1,450,000 at 40%: a bill of £580,000. Keeping the estate below £2,000,000, often through lifetime gifts, protects the full allowance.
How do you claim the first parent's unused allowances?
This is the step families most often miss: nothing is claimed on the first death, so the unused percentage sits dormant, sometimes for decades, until the second parent's executors claim it. The process runs as follows:
- Value the whole estate at the second death. Add up property, savings, investments and possessions, then deduct debts and funeral costs to reach the net estate figure HMRC assesses.
- Establish the deceased's own allowances. Every estate has its own nil-rate band of £325,000, plus a residence nil-rate band of up to £175,000 where a home passes to descendants.
- Work out the unused percentage from the first death. If the first parent left everything to the survivor, 100% of both bands is usually available. If they left gifts to others, less may transfer.
- File the transfer claims with the estate account. Form IHT402 transfers the nil-rate band; forms IHT435 and IHT436 claim and transfer the residence nil-rate band, submitted alongside the IHT400 account.
- Apply the percentages to today's bands. A 100% transfer gives another £325,000 and another £175,000 at current rates, not the lower cash figures that applied when the first parent died.
- Meet the deadlines. If documents from the first death are hard to find, executors can make a provisional claim and send supporting evidence later.
The first parent's death certificate, will and grant of probate make the claim smoother; where those papers are missing, our guide on what probate is explains how to obtain copies.
What do the executors have to do, and by when?
The tax is paid from the estate, not personally by the beneficiaries, and usually before probate is granted, when money is often still locked in the estate. Tax on a house or certain other assets can be paid in up to 10 yearly instalments, though interest usually applies.
| Task | Deadline |
|---|---|
| Pay the inheritance tax due | End of the sixth month after the month of death; interest runs after that date |
| Deliver the estate account (form IHT400) | Within 12 months of the end of the month of death |
| Claim the transferred nil-rate band (form IHT402) | Within 24 months of the end of the month of the second death |
| Claim the residence allowance and its transfer (forms IHT435 and IHT436) | Filed with the IHT400 account |
| Pay tax on property in instalments | Up to 10 annual instalments; interest usually applies |
Source: gov.uk/paying-inheritance-tax and gov.uk, valuing the estate, as at August 2026, subject to change.
What do families get wrong about the second death?
These are the patterns we see most often after a second death, and each can change the tax by tens of thousands of pounds. An estate planning review can look at the will, the home's ownership, and lifetime gifts together.
- Treating the transfer as a cash sum. The unused band moves as a percentage. If the first parent died when the nil-rate band was £250,000 and used none of it, the survivor still inherits 100%, worth £325,000 today. The frozen bands mean this usually works in the family's favour.
- Not claiming the transfer. Because the claim happens years later, on forms IHT402 and IHT436, executors sometimes overlook it and pay tax that was never due. The allowance is not applied unless it is claimed.
- Losing the residence allowance. The home must pass to direct descendants. Leaving it to a sibling, a friend, or into certain discretionary trusts can forfeit up to £350,000, so wording matters, as our guide on how to write a will explains.
What recent changes affect the second death?
| Change | What applies now | From |
|---|---|---|
| Agricultural and business property relief | 100% relief on the first £2,500,000 of combined qualifying assets per person, 50% above that, transferable to £5,000,000 for a couple. This replaced the previous open-ended 100% relief. | 6 April 2026 |
| Unused pension funds | Most unused pension pots are brought within the value of the estate for inheritance tax. | 6 April 2027 |
| Nil-rate band, residence band and £2m taper | Frozen at current levels, so more estates cross the threshold as values rise. | Frozen until 5 April 2031 |
Sources: gov.uk, Budget 2025 overview of tax legislation and rates; the agricultural and business relief reform was announced on 23 December 2025. As at August 2026, subject to change.
Frequently asked questions
Do you pay inheritance tax when the second parent dies?
You pay inheritance tax when the second parent dies only if the estate exceeds the available allowances. A couple who owned a home and left everything to each other, then to their children, can often pass up to £1,000,000 tax free. Anything above the combined allowances is taxed at 40% (gov.uk, as at August 2026, subject to change).
Why is there usually no inheritance tax on the first parent's death?
Gifts between spouses and civil partners are exempt from inheritance tax, so whatever the first parent leaves to the surviving parent passes tax free. Their unused allowances are not lost either; they can be transferred and used when the second parent dies (gov.uk, as at August 2026, subject to change).
How much can a couple leave before inheritance tax on the second death?
A couple can often leave up to £1,000,000 before inheritance tax on the second death: two nil-rate bands of £325,000 and two residence allowances of £175,000, where a home passes to direct descendants. Without a qualifying home the ceiling is £650,000, and estates above £2,000,000 lose residence allowance to the taper (gov.uk, as at August 2026, subject to change).
How do you claim the first parent's unused allowances?
The second parent's executors claim the transfer on HMRC forms filed with the estate account: form IHT402 for the nil-rate band and forms IHT435 and IHT436 for the residence nil-rate band. Each transfer is a percentage of the band in force at the second death, and the nil-rate band claim must be made within 24 months of that death (gov.uk, HMRC inheritance tax manual, as at August 2026, subject to change).
Does gifting before the second death reduce the tax?
It can. Each person has a £3,000 annual gift exemption and can make small gifts of £250 to any number of people. Larger gifts usually fall outside the estate if the giver survives seven years, with taper reducing the tax on gifts made three to seven years before death. Gifts within seven years may still count towards the estate (gov.uk, as at August 2026, subject to change).