Who needs it
- Executors of someone whose spouse or civil partner died before them without using all of their nil-rate band.
- Executors who are filing a full IHT400 for the estate, because the claim is made with it.
What you need before you start
- The completed IHT400 for the estate of the person who died second.
- Details of the first death and of how much of that estate's nil-rate band was used, which the form asks for.
- The current IHT402 PDF from GOV.UK, completed on screen in Adobe Reader.
How to file IHT402
- 1Check the type of estate first. If the survivor's estate is worth no more than £650,000 and the whole unused band transfers, it's usually an excepted estate, and no IHT400 or IHT402 is needed.
- 2Otherwise, work out how much of the first spouse's or civil partner's nil-rate band went unused.
- 3Complete the IHT402 on screen and print it.
- 4Send it with the IHT400 and any other schedules.
What IHT402 does
HMRC describes IHT402 as the claim, used with form IHT400, to transfer an unused Inheritance Tax threshold from a spouse or civil partner who died first to the estate of the person who has died.
The threshold is the nil-rate band, £325,000 for one person. If none of the first band was used, for example because everything passed to the surviving spouse, the survivor's estate can have up to double.
When you don't need it
GOV.UK's check-the-type-of-estate guidance says an estate worth £650,000 or less, with unused threshold transferred from a spouse or civil partner who died first, is usually an excepted estate. You report its estimated value when applying for probate or confirmation instead of sending full details.
The residence nil-rate band is a separate claim
A late spouse's unused residence nil-rate band transfers on a different form, IHT436, alongside IHT435. If both bands are going unused, you may need IHT402 and IHT436.
Common mistakes
- Not claiming the transfer at all, which leaves the estate with a single nil-rate band.
- Assuming the transfer is a fixed sum. What transfers is the unused share of the band, applied to the band in force when the survivor dies.
- Filing a full account when the estate qualifies as an excepted estate with the transfer.
Related
What else will you need?
- IHT400IHT400 Inheritance Tax accountIHT400 is HMRC's Inheritance Tax account: the full report of an estate's assets, debts, gifts, reliefs and exemptions.
- IHT435IHT435 / IHT436 residence nil-rate bandIHT435 claims the residence nil-rate band, up to £175,000, when someone who died on or after 6 April 2017 leaves a home they owned to their direct descendants.
- IHT421IHT421 probate summaryIHT421 is HMRC's probate summary, now used only to apply for a grant of representation in Northern Ireland.
Rather we did it?
Countify can handle this for you, for a fixed fee agreed upfront.
Questions
Frequently asked questions.
Can the nil-rate band transfer if my spouse died years ago?
The claim is made on the second death, using the unused share of the first spouse's band. HMRC's IHT402 notes explain how earlier deaths are treated.
Do I send IHT402 on its own?
No. HMRC says it's used with form IHT400.
Is it the same as the residence nil-rate band claim?
No. The residence nil-rate band is claimed on IHT435, and a late spouse's unused residence band transfers on IHT436.
Checked against GOV.UK on · Reviewed by Kamran Ishaq FCCA, Founder & CEO, on .
Sources: Claim to transfer unused nil rate band (IHT402) (opens in a new tab) (HM Revenue & Customs); Valuing the estate: check if you need to send full details (opens in a new tab) (GOV.UK); Inheritance Tax forms (opens in a new tab) (HM Revenue & Customs).
Countify is an independent accountancy practice. We aren't part of, or endorsed by, HM Revenue & Customs. Always file using the official form or service.
Contains public sector information licensed under the Open Government Licence v3.0 (opens in a new tab).