Because of the spouse/CP exemption (1.8), if a spouse or CP were to die leaving everything to his or her surviving spouse or CP, there would be no inheritance tax to pay.
However, IHT would be an issue on the death of the surviving spouse or CP.
When the surviving spouse or CP died, the first £325,000 of his or her estate would be tax-free due to the nil-rate band, and the remainder would be taxed at the rate of 40%, just like that of a person who died having been single throughout his or her life.
However, the possibility exists to make the situation more favourable.
Since 9 October 2007, it has been possible to transfer the nil-rate band of the first spouse or civil partner to die to the estate of ...