The transferable allowances regime, where the unused nil rate band of the first deceased spouse can often be passed to the surviving spouses, gives an effective double nil rate band for most married couples.
Main Residence Nil Rate Band
As with the nil rate band the surviving spouse of a marriage can have a double main residence nil rate band, giving a married couple the ability to pass down assets of £650,000 + £350,000 = £1,000,000, free of Inheritance Tax. To qualify for the main residence nil rate band the property must have at some point been the deceased’s private residence and must be left to a lineal descendant (child, grandchild etc.). If the deceased’s estate value is above £2m then the main residence nil rate band will be tapered at a rate of £1 for every £2 above the £2m limit. You can apply for downsizing relief for property downsized after 8th July 2015. (Amended 3rd March 2021)