Inheritance Tax

Do unmarried couples pay more inheritance tax?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 9 August 2026. Last reviewed 9 August 2026.

The short answer

Yes, in most cases unmarried couples pay far more inheritance tax than married couples on identical estates. The unlimited spouse and civil partner exemption does not apply to cohabiting partners, however long you have lived together, so anything you leave your partner above the £325,000 nil-rate band is taxed at 40%. You also cannot transfer unused nil-rate bands between you, so the £1 million a married couple can pass on together is out of reach. And if either of you dies without a will, the intestacy rules in England and Wales give the surviving partner nothing at all.

A gift on death to an unmarried partner is chargeable: only the £325,000 nil-rate band shelters it, with the excess taxed at 40%, or 36% if at least 10% of the net estate goes to charity.
On an £825,000 estate left entirely to a partner, a spouse would pay nothing but an unmarried survivor faces a £200,000 bill: £500,000 taxed at 40%.
Unused nil-rate bands and residence nil-rate bands transfer only between spouses and civil partners, so unmarried couples can never combine allowances to reach £1 million.
The residence nil-rate band of up to £175,000 is only available where a qualifying home passes to direct descendants, not to a partner, and both bands are frozen until 5 April 2031.
Under intestacy an unmarried partner inherits nothing automatically, so a valid will is the essential first step.

Why relationship status changes the bill

UK inheritance tax gives married couples and civil partners two powerful reliefs that cohabiting partners cannot use: the unlimited spouse and civil partner exemption, and the ability to transfer unused allowances to the survivor. "Common law marriage" has no legal standing in England and Wales, so neither relief applies no matter how entwined your finances are. The gap is stark. Suppose one partner dies leaving an £825,000 estate entirely to the other. A surviving spouse pays no inheritance tax at all. An unmarried survivor gets one £325,000 nil-rate band, leaving £500,000 taxed at 40%: a £200,000 bill driven purely by relationship status. Our guide to inheritance tax for unmarried couples works through the full mechanics.

The allowances you cannot combine

When a married person dies without using all of their nil-rate band, the unused percentage passes to the survivor, and the same applies to the residence nil-rate band. That is how a married couple shelters up to £1 million between them. Unmarried partners each stand alone with a single £325,000 band, and no unused allowance can move between them. The residence nil-rate band adds a further trap: it only applies where a qualifying home passes to direct descendants, so leaving your share of the house to your partner rather than your children can forfeit it. All of these figures are frozen until 5 April 2031, so the exposure widens each year as estates grow.

How to close the gap

Four steps do most of the work. First, make a will: under intestacy an unmarried partner inherits nothing, and a court claim under the Inheritance (Provision for Family and Dependants) Act 1975 is a backstop, not a plan. Second, write life insurance in trust so the payout sits outside your estate and can fund the tax bill without a forced sale of the home. Third, use lifetime gifts under the 7-year rule, alongside the £3,000 annual exemption. Fourth, weigh marriage or a civil partnership honestly: it unlocks both the unlimited exemption and the transferable bands, though it is a personal decision, not a tax product. If you want a plan built around your own numbers, Horizon works on fixed fees agreed upfront, and you can book a free clarity call at /book.

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Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

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