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The rules around inheritance tax (IHT) allow spouses or civil partners to transfer any unused nil rate band to the surviving spouse or civil partner, following his or her death. This means that a person’s estate can benefit from twice the nil rate band that would normally apply.
However, in order to benefit from this rule, following the death of the second spouse or civil partner, an application must be made to HM Revenue & Customs (HMRC) for the transfer of the unused nil rate band within two years of the end of the month in which they died.
In order to make an application to HMRC, you will need to be able to provide details of the people who benefited from the will of the spouse or civil partner who died first and what they were entitled to receive.
You will also need to give details of any assets that were jointly owned or assets in trust that were part of that individual’s estate.
Furthermore, you will need to give details of any gifts or transfers made within seven years of the first spouse or civil partner’s death that were chargeable on their death.
It is likely that the executor or administrator of the person’s estate will be able to help with finding out this information.
In addition to the information set out above, there are also a number of specific documents which you must provide to the Revenue. These are a copy of the grant of representation to the estate of the spouse or civil partner who died first, a copy of that individual’s Will and a copy of any deed of variation made in respect of that person’s estate.
If you are unable to identify copies of these documents, you should contact the solicitor who acted for the estate, the executors or administrators, family members or close friends.