What is the spouse exemption for inheritance tax?
Answered 11 March 2026
Here is a comprehensive answer on the IHT spouse/civil partner exemption.
Inheritance Tax: Spouse/Civil Partner Exemption
What the law says
The core exemption is found in IHTA 1984, s.18. A transfer of value is an exempt transfer to the extent that the value transferred is attributable to property which becomes comprised in the estate of the transferor's spouse or civil partner, or — so far as the value is not so attributable — to the extent that the spouse's or civil partner's estate is increased.
The exemption applies to both lifetime transfers and transfers on death.
Exclusions: The exemption does not apply where the disposition:
- takes effect on the termination after the transfer of any interest or period; or
- depends on a condition not satisfied within 12 months of the transfer.
However, a simple survivorship condition (i.e. the spouse must survive the other) does not disqualify the exemption.
Restriction where the recipient spouse/civil partner is not a long-term UK resident (or, before 6 April 2025, not UK-domiciled):
Where the transferor is a long-term UK resident but the recipient spouse/civil partner is not, the exempt amount is capped at the nil-rate band (currently £325,000) at the time of the transfer — i.e. the upper limit of the 0% band in Schedule 1 to IHTA 1984.
For transfers before 6 April 2013, this cap was a fixed £55,000.
HMRC guidance / practice
General scope: HMRC treats the exemption as unlimited where both spouses/civil partners are UK-domiciled (or, from 6 April 2025, both are long-term UK residents).
Restriction in practice: The exemption is restricted to the nil-rate band (£325,000 as at the date of transfer) where:
- the deceased/donor is domiciled in the UK (or, from 6 April 2025, is a long-term UK resident), and
- the spouse/civil partner is not domiciled in the UK (or not a long-term UK resident from 6 April 2025).
For transfers before 6 April 2013, the restriction was £55,000.
Election option: A non-UK domiciled (or non-long-term-resident) spouse/civil partner may elect to be treated as UK-domiciled under IHTA 1984, s.267A, which removes the cap and allows the full unlimited exemption to apply.
Domicile change from 6 April 2025: From 6 April 2025, the concept of domicile for IHT purposes is replaced by long-term UK residence. The restriction rules operate in the same way but by reference to long-term UK residence status rather than domicile.
Trusts: Where assets pass into a trust rather than outright to the spouse, the exemption may not be available unless the spouse has a qualifying interest in possession. For example, where a husband dies leaving his wife an interest in possession that is not a qualifying interest, no spouse relief is available — but if the assets pass outright to her, spouse exemption is available.
Close companies: Spouse/civil partner exemption is also available on deemed transfers by close companies, to the extent that the estate of the spouse or civil partner of a participator is increased.
Summary Table
| Scenario | Exemption |
|---|---|
| Both spouses UK-domiciled / long-term UK resident | Unlimited |
| Transferor UK-domiciled/resident; recipient not (transfer on/after 6 April 2013) | Capped at nil-rate band (£325,000) |
| Transferor UK-domiciled/resident; recipient not (transfer before 6 April 2013) | Capped at £55,000 |
| Recipient elects to be treated as UK-domiciled (s.267A) | Unlimited |
Citation sources
PART 4 Excise duties and other taxes Inheritance tax Transfer to spouse or civil partner not domiciled in United Kingdom 178 1 Section 18 of IHTA 1984 (transfers between spouses or civil partners) is amended as follows. 2 In subsection (2) (transfer to spouse or civil partner not domiciled in United Kingdom), for “£55,000” substitute “ the exemption limit at the time of the transfer, ” . 3 After subsection (2) insert— 2A For the purposes of subsection (2), the exemption limit is the amount shown
There are two distinct groups of IHT exemptions those which apply only to lifetime transfers, and those which apply to both death and lifetime transfers. This section is concerned only with those exemptions which apply solely to lifetime transfers and these are: Annual exemption (IHTM14141) Small gifts (IHTM14180) Normal expenditure out of income (IHTM14231), and Gifts in consideration of marriage or civil partnership (IHTM11032) (IHTM14191). If the transfer is wholly exempt, for example because
PART II EXEMPT TRANSFERS CHAPTER I GENERAL Transfers between spouses or civil partners . 18 1 A transfer of value is an exempt transfer to the extent that the value transferred is attributable to property which becomes comprised in the estate of the transferor’s spouse or civil partner or, so far as the value transferred is not so attributable, to the extent that that estate is increased. 2 If, immediately before the transfer, the transferor but not the transferor’s spouse or civil partner is a
Two types of exemption have, or had, a value limit the IHTA84/S18 spouse or civil partner exemption (IHTM11031), (IHTM11032) is limited (IHTM11033) where the transferor is domiciled in the UK (to 5 April 2025) or long-term resident (from 6 April 2025) and the transferee is domiciled outside the UK (to 5 April 2025) or not a long-term resident from (6 April 2025). Since 6 April 2013 the limit has been equal to the nil-rate band at the date of transfer. Prior to that the limit was £55,000 (IHTM110
From 6 April 2025, for inheritance tax purposes, domicile is replaced by long-term UK residence and you can find details of these rules at IHTM47000. Guidance relating to spouse or civil partner exemption and long-term residence elections post 6 April 2025 can be found at IHTM47030. Spouse or civil partner exemption (IHTM11032) on transfers on death and life is restricted to a sum equivalent to the nil rate band at the time of the transfer where the: deceased or donor is domiciled in the UK an
no tax was chargeable on the later gift, or the exemption is unlimited, such as transfers to the domiciledspouse or civil partner (IHTM11032).
Any transfer by a close company is a deemed transfer (IHTM04061) for Inheritance Tax purposes and is not a potentially exempt transfer (IHTM04057), but the annual exemption (IHTM14141) is available as the restriction in IHTA84/S19(5) to deemed transfers of value does not extend to transfers under IHTA84/S95(5). as is spouse or civil partner exemption (IHTM11031) to the extent that the estate of the spouse or civil partner of a participator is increased. The exemptions for small gifts (IHTM14180)
H has a transitional serial interest that he took in 2007 when the trusts were reorganised. In 2020 he dies leaving his wife an interest in possession. The interest she takes is not qualifying and is not a transitional serial interest because it does not arise on the termination of a pre-22 March 2006 interest in possession. No spouse relief is available. There is a death uplift on the death of H for capital gains tax purposes and inheritance tax is payable. If the assets pass outright to her th