Death of a spouse or civil partner
In this section, we tell you what you need to do in relation to tax matters if your spouse or civil partner dies. We also set out some of the common areas where problems can occur.
Do I need to contact HM Revenue & Customs?
Yes, you may need to contact HMRC, either directly or through the Tell Us Once service. See our section on notifying a death for more information.
If my spouse or civil partner dies, will this affect my state pension?
If your spouse or civil partner dies, this may affect your state pension entitlement. In some situations, you may be able to claim more state pension. The rules for inheriting or increasing state pension from a spouse or civil partner are explained on GOV.UK.
Importantly, if you do get a new, or extra, state pension as a result of your spouse or civil partner’s death, you will need to make sure that HMRC are aware of the change so that your own tax position is correct. See ‘If my spouse or civil partner dies, will this affect my tax position?’ below.
You may also be entitled to any extra state pension your spouse or civil partner was entitled to because they put off claiming (deferred) it when they reached state pension age. There is more information on inheriting a deferred state pension on GOV.UK.
There is also a more detailed Department for Work and Pensions (DWP) guide to what happens if a person dies while deferring their state pension on GOV.UK.
If you are widowed you may also be able to claim bereavement benefits. There is more information in our section ‘What is the effect of death on state benefits and credits?’.
Yes, it is most likely that your tax position will change – especially if you look at your overall tax position as a household. Your late spouse or civil partner will have had a personal allowance to reduce the amount of tax they paid on their income. You have a personal allowance as well. So, between you, you could previously have had twice as much income as a household as you can now without paying tax.
This change can be particularly noticeable if your late spouse or civil partner was a pensioner and, on top of your own income, you now ‘inherit’ some element of extra private or state pension income.
Let’s say for instance that you had £13,000 of pension income in total before your spouse or civil partner’s death. In 2018/19, the personal allowance is £11,850, so you would only pay tax on £1,150 of your income. Your spouse or civil partner also has £13,000 of pension income, so again they paid tax on £1,150 of it. So together you have £26,000 income, and pay tax of £460 (£2,300 at 20%), assuming you do not live in Scotland.
But if your spouse or civil partner died on 5 April 2018, and from 6 April 2018 you inherit half of their pension (£6,500) on top of your own pension, your total income will then be £19,500. After deducting your personal allowance of £11,850, you will pay tax on £7,650. So you now have £19,500 of income and pay tax of £1,530 (£7,650 @ 20%).
So, even though you may feel as though you have less income if you previously budgeted as a household, more tax is payable. It is very important to make sure HMRC are aware if you start receiving any income or increased amount of income, so that you do not end up underpaying tax. Read on for more information.
For 2016/17 and later years, you only need to pay tax on your savings income if it exceeds your personal savings allowance.
Like the personal allowance situation noted above, this might be an issue to watch out for if you have inherited savings from your late spouse or civil partner that pay interest. Your personal savings allowance, if you are a basic rate taxpayer, allows you to receive up to £1,000 in a tax year without any tax being payable. Your spouse or civil partner would also have had a personal savings allowance, so – between the two of you – you may have been paying no tax on savings income. But once you start to receive the combined income in your sole name, you will need to double check that you are not due to pay tax, or whether the additional savings interest you have acquired is covered by (e.g.) the zero per cent starting rate on savings.
You may also find our web page ‘savings and tax' helpful.
If your spouse or civil partner dies, as we have explained, you may get extra money from pensions or savings for example. If you receive extra money, this may mean you have to pay more tax.
There is a guide on GOV.UK explaining what income you must report to HMRC, and what income they should already know about. However, even if HMRC should know about changes to your income (such as an increase in state pension, or receipt of a spouse’s pension), sometimes the information does not get through, or errors can occur. So check your tax to make sure that all of your new sources of income are included.
As well as your income changing, the amount of your allowances (i.e. the amount you do not pay income tax on), may also change if your spouse or civil partner dies.
Up until your spouse or civil partner’s death, you may have claimed other allowances or transferred allowances between you which may change after death. For example, you may have claimed to transfer part of one of your personal allowances to the other (the ‘marriage allowance’). In that case, the last year of claim will be the year in which the death occurred. GOV.UK explains how marriage allowances works in the year of death.
Note that claims to the marriage allowance are allowed in cases where a partner has died before the claim is made. Such claims can be backdated by up to four years provided all other conditions for the allowance are met. If your partner was the lower earner, the person responsible for managing their tax affairs (the executor or personal representative, if this isn’t you) will need to contact HMRC to make the claim.
If one of you was born before 6 April 1935, you may have claimed the married couple’s allowance. More information on this, including what happens on death, is given in our pensioner section, but essentially:
If you and your spouse or civil partner were eligible for the married couple's allowance (MCA), the full MCA is available in the year of death.
If the allowance was given to you in the first instance (e.g. because you have the higher income) but your late spouse or civil partner had claimed all or part of the MCA from you, the balance can be transferred back to you if their income to the date of death is insufficient to use it all.
Similarly, if your spouse or civil partner dies leaving a surplus MCA, you can use this against your income arising in the tax year both before and after the date of death.
If your spouse or civil partner was claiming blind person’s allowance (BPA) and they did not have enough income to use up the allowance, you can ask HMRC to transfer the rest of the BPA for that tax year to you. There is more information on the BPA and how to transfer it in the ‘tax basics section’ of this website.
If my spouse or civil partner dies, will this affect my ISA?
On the death of your spouse or civil partner, you can inherit an additional ISA allowance equal to the value of your spouse or civil partner’s ISA savings at the date of their death. The additional allowance will not count towards your normal annual subscription limit. Broadly this would allow you, if you wish, to transfer your spouse’s or civil partner’s ISA into your own ISA.
You may not use the additional allowance to subscribe to a junior ISA.
To be eligible, you must have been living together at the time of your spouse or civil partner’s death. Living together means that you must not be separated by a court order, by a deed of separation, or as a matter of fact in circumstances in which the separation is likely to be permanent. If, for example, one of you had moved into a care home, that would not necessarily mean that you were not living together for these purposes.
You must also be eligible to subscribe for an ISA in your own right – this means that you must be resident for tax purposes in the UK and must be aged 16 or over for a cash ISA (18 or over for a stocks and shares ISA). If you do not live in the UK, you must be a Crown servant, or the spouse or civil partner of a Crown servant.
Time limits also apply – normally you have to make a subscription to an ISA to use this additional allowance within three years of the date of death.
You can find out more about inheriting an ISA on GOV.UK.
Do I have to sort out my spouse or civil partner’s tax affairs myself?
It is usually down to the deceased’s executor or personal representative to sort out their tax affairs. The executor or personal representative may be you, or it may be a solicitor, another relative or family friend.
If it is you, you can use an agent (for example, a tax adviser or lawyer) to deal with some of the tax affairs of the estate if you do not feel confident to deal with them yourself. Their fees are paid out of the estate.
When your spouse or civil partner dies, the tax year is divided into two parts for the purposes of assessing their tax liability – up to the date of death and from the date of death.
For example, if your spouse or civil partner dies on 15 July 2018, the 2018/19 tax year is divided into the periods:
- Up to date of death – 6 April 2018 to 15 July 2018; and
- From the date of death – 16 July 2018 to 5 April 2019.
Up to the date of the death
Note that a full personal allowance is available for the tax year of the death to set against income arising before the date of death.
If your spouse or civil partner makes any capital gains in the part of the tax year before they die, the full year's annual exemption (£11,700 for 2018/19) can be used against the gains and only any remaining balance is chargeable to CGT.
If your spouse or civil partner makes any capital losses in that period, these can be carried back to the previous three tax years, latest first, and set against gains in those years.
Normally the executor or personal representative deals with a person’s tax affairs up to the date of death. More information is therefore available in our section for executors and personal representatives ‘How do I deal with the tax affairs of the deceased?’.
From the date of death
The administration period during which the executor or personal representatives deal with the estate may last some months or even years.
The executor or personal representative have to deal with the tax affairs of the estate (in other words deal with any income or capital gains generated by the property that was owned by the deceased) during this period.
Note that personal allowances are not available to the executor or personal representative after the date of death to set against estate income.
However the capital gains tax annual exemption is available to use against any estate capital gains for the tax year of death and the following two years.
Again, normally the executor or personal representative deals with a person’s tax affairs from the date of death. More information is therefore available in our section for executors and personal representatives ‘how do I deal with the tax affairs of the deceased?’.
What do I have to do about inheritance tax?
We cover inheritance tax (IHT) on a death, including the rules around spouses or civil partners, in detail in the section ‘What is inheritance tax?’ You may also find the section ‘What is the nil rate band?’ helpful.
What if I can't find the will?
If you do not know where your spouse or civil partner put their will, GOV.UK offers limited guidance on locating a will. You should try searching through the deceased’s possessions and correspondence, and contact any solicitors they may have dealt with in the past from letters you find. Sometimes, the deceased might have asked their bank to store documents for them, so that is another place to check. If made through a solicitor, the existence of a will and its location may have been noted with the ‘National Will Register’ which is endorsed by The Law Society.
If no original will can be found, in some circumstances it is possible to use a copy of a validly executed will (this may be done, for example, if the deceased had given their executor such a copy). Ultimately, if no will or copy of a will is found, or a will is found but is invalid (see the ‘Making a will’ guide on GOV.UK – part 3 – for what makes a valid will), the intestacy laws will apply. See also our ‘Tax and writing a will’ guide.
Where can I find more information?
Your local authority might be able to direct you to sources of bereavement support. Find out what might be available by using the following websites:
- England or Wales – use the facility on GOV.UK
- Scotland – visit the Scottish Government website
- Northern Ireland – visit nidirect
You can find out where to get help from other third party organisations in our ‘getting help section’.
Tax Help for Older People have published 'A Guide to Taxation at Bereavement', which is available on their website, which looks at the taxation of a surviving partner.
HMRC have a bereavement tool that provides guidance for a surviving spouse or civil partner.
If you are concerned about what will happen to your pension income after the death of your spouse or civil partner, you may be able to find assistance from The Pensions Advisory Service, an independent non-profit organisation that provides free information and guidance on pensions.