HMRC have issued new guidance on nil-rate transfers (transfers of the unused Inheritance Tax (IHT) nil-band to the surviving spouse or civil partner) - which will come as a relief to those caught up in the complexities of the process, which is by no means as straightforward as it looks.

The procedure for the transfer of the ‘nil-rate band’ (currently £312,000) between spouses for IHT purposes seemed like simplicity itself when it was first announced by Chancellor Alistair Darling. But, as is usual with tax matters, the reality is that there are some significant complexities.

One important point is that a claim to transfer the unused part of the IHT allowance must normally be made by personal representatives no later than 24 months after the end of the month in which the second death occurred. HMRC do, however, have discretion to extend the period for claim if appropriate.

A further point is that for civil partners, a transfer is only available where the first death occurred after 5 December 2005, as that was the date on which the Civil Partnership Act 2004 came into effect in the UK.