Inheritance Tax Act 1984 section 8G

Meaning of "brought-forward allowance"

Section 8G explains how to calculate the brought-forward allowance, which is the amount of unused residence nil-rate band that can be transferred from a deceased spouse's or civil partner's estate to the surviving partner's estate on their death.

• The brought-forward allowance allows a surviving spouse or civil partner to inherit any unused proportion of their deceased partner's residence nil-rate band, expressed as a percentage of the allowance available at the time of the first death and then applied to the allowance in force at the survivor's death.
• The total percentage carried forward from one or more deceased spouses or civil partners is capped at 100% of the residence nil-rate band available at the survivor's death, and a formal claim must be made or the allowance is nil.
• Where the first spouse or civil partner died before 6 April 2017, a full 100% allowance of £100,000 is deemed available for carry-forward, even though the residence nil-rate band did not exist at that time.
• However, if the estate of a spouse or civil partner who died before 6 April 2017 exceeded £2,000,000, the deemed £100,000 carry-forward amount is reduced by £1 for every £2 above that threshold, and cannot fall below nil.