Married couples and civil partners can leave everything to each other free of inheritance tax. Unmarried couples can't. If you leave your estate to your partner, anything above the tax-free allowance is taxed at 40% on the first death, and that includes your share of the home you live in together. A Will makes sure your partner inherits, but it doesn't remove the tax.
Key Takeaways
- There's no spouse exemption for unmarried partners. Inheritance tax can be due on the first death, not just the second.
- Everyone has a tax-free allowance (the nil-rate band) of £325,000. Above that, the rate is usually 40%.
- The extra residence allowance of up to £175,000 only applies when your home goes to your children or grandchildren, not to an unmarried partner.
- The tax usually has to be paid before probate is granted, so a surviving partner may have to find the money quickly.
- This applies however you own your home: in joint names, as tenants in common or in one name.
This guide explains the rules in general terms. It isn't tax or financial advice. Inheritance tax rules are the same across the UK.
A real example from our files
One of our clients lived with their partner for many years. They weren't married, and they had a young child together. When the partner died, the value of their share of the home, together with their other assets, took the estate well over the tax-free allowance.
Because there's no exemption for unmarried partners, the surviving partner had to find around £100,000 of inheritance tax to stay in their own home, at the same time as grieving and looking after a young child.
As one of our team puts it: "You don't even consider that until it happens!" Most unmarried couples simply assume they're treated like married couples. They aren't.
Why are married and unmarried couples treated differently?
Gifts between husbands, wives and civil partners are exempt from inheritance tax, whether they're made during your lifetime or in your Will. Any tax-free allowance the first spouse doesn't use can also pass to the survivor, so a married couple can usually leave up to £1 million free of tax between them.
None of that applies to unmarried partners, however long you've been together. In tax terms, leaving your estate to your partner is treated the same as leaving it to a friend.
| Married or civil partners | Unmarried partners | |
|---|---|---|
| Leaving everything to each other | Free of inheritance tax | Taxed above £325,000 |
| Unused allowance passed to the survivor | Yes | No |
| Residence allowance if the home goes to your partner | Can be passed on to the survivor | No |
| When tax is first likely to be due | Usually on the second death | Possibly on the first death |
How is inheritance tax worked out?
In simple terms:
- Add up everything you own when you die, including your share of the home, savings, investments, cars and possessions, less any debts and funeral costs.
- Take off the tax-free allowance of £325,000. This has been frozen since 2009, and the government has said it will stay at that level until at least April 2030.
- Take off the residence allowance of up to £175,000, but only if your home, or your share of it, goes to your children or grandchildren (including stepchildren). It doesn't apply when the home goes to an unmarried partner, and it's reduced for estates worth more than £2 million.
- Anything left is usually taxed at 40%. (The rate drops to 36% if you leave at least 10% of your estate to charity.)
Your share of a jointly owned home counts towards your estate, even if the home passes to your partner automatically as joint tenants.
An illustration
Say your estate is worth £575,000, made up of your half of the family home plus some savings. (This is a made-up example to show how the numbers work.)
| If you leave everything to... | Allowances | Taxable | Inheritance tax at 40% |
|---|---|---|---|
| Your unmarried partner | £325,000 | £250,000 | £100,000 |
| Your children | £325,000 + £175,000 | £75,000 | £30,000 |
| Your husband, wife or civil partner | Fully exempt | £0 | £0 |
The same estate can produce a £100,000 bill, a £30,000 bill or no bill at all, depending only on who it goes to and whether you're married.
When does the tax have to be paid?
Inheritance tax is normally due by the end of the sixth month after the death, and the Executors usually have to pay at least some of it before the Probate Registry will grant probate. That can be difficult when most of the money is tied up in the house.
Tax on a home or land can often be paid in yearly instalments over ten years, although interest may be charged. Even so, a surviving partner may face hard choices about how to pay.
What can unmarried couples do?
Every couple's situation is different, and we don't give tax or financial advice. But these are the questions worth raising:
- Make Wills first. Without a Will, your partner inherits nothing at all. See our guide to Wills for unmarried couples.
- Think about who inherits the home. Leaving your share of the home to your children can make use of the residence allowance, while a Right to Reside or Life Interest Trust can still let your partner live there. Trusts have their own tax rules, so this needs careful planning.
- Check how you own your home. See joint tenants or tenants in common.
- Consider whether marriage or a civil partnership is right for you. It's a personal decision, but it's the only way to get the spouse exemption. Remember that marrying cancels any existing Wills, so you'd need new ones.
- Take professional tax advice if your combined estate is likely to be over the tax-free allowances. Some couples use life insurance written in trust to provide money for a future tax bill.
From April 2027, most unused pension funds are also due to count towards your estate for inheritance tax, so couples who expect to be under the limits today may be over them in future.
Frequently asked questions
Do unmarried couples pay inheritance tax on the first death?
They can. If the estate left to an unmarried partner is worth more than the £325,000 tax-free allowance, inheritance tax is due on the amount above it.
Does owning our home as joint tenants avoid inheritance tax?
No. Joint tenancy decides who inherits the home, not whether tax is due. The share belonging to the partner who died still counts towards their estate.
Can I pass my unused allowance to my unmarried partner?
No. Only husbands, wives and civil partners can inherit an unused tax-free allowance.
Is a cohabitation agreement the same as a Will?
No. A cohabitation agreement sets out what happens if you separate. It doesn't decide who inherits when one of you dies, and it doesn't affect inheritance tax.
The short version: don't wait until it happens
Unmarried couples are taxed as if they were strangers to each other. If your joint assets, including your home, are worth more than the tax-free allowance, the surviving partner could face a large bill just when they can least afford it. Make Wills now, and get professional advice on whether anything else would help. Contact the Will Team to talk about your Wills.
About this guide
This guide was written and checked by the Downloadawill Will Team. It explains inheritance tax in general terms and isn't tax, legal or financial advice for your own situation. Figures are for the 2026/27 tax year. Downloadawill is a trading style of Direct Wills. All our Will Writers are Members of The Society of Will Writers. We've been writing Wills for people in England and Wales since 1997. Read more about us.
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