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For some Muslim couples with substantial assets, a standard Will that leaves everything to the surviving spouse may deserve a closer review. It can be an entirely appropriate arrangement in many circumstances. However, when an estate is likely to be worth more than £2 million, the residence nil-rate band can begin to reduce. This is commonly called the £2 million taper.
That taper may be particularly relevant where the surviving spouse is expected to hold the family home and most of the couple’s wealth by the time they die. Depending on the facts, the eventual estate could lose some or all of a valuable inheritance-tax allowance. This article explains the general rules and why the wording of an Islamic Will matters. It is not personal legal or tax advice.
Important: Inheritance-tax outcomes depend on the values and ownership of assets, debts, lifetime gifts, earlier deaths, the terms of the Will, the type of any trust and the law at the relevant time. Please obtain advice tailored to your circumstances before making changes to a Will or estate plan.
The potential inheritance-tax allowances for a married couple
For the tax years currently published by HMRC, the basic inheritance-tax threshold, known as the nil-rate band, is £325,000 per person. If the first spouse or civil partner does not use all of their basic nil-rate band, the unused percentage may usually be transferred to the survivor. This can create a potential basic allowance of up to £650,000 on the second death.1
A further allowance, the residence nil-rate band (RNRB), may be available where a person leaves a qualifying home, or a qualifying share of one, to direct descendants such as children or grandchildren. The maximum RNRB is currently £175,000 per person. If the conditions are met and a full unused percentage is transferable from the first spouse or civil partner, the potential combined RNRB could be up to £350,000.1
| Allowance | Current maximum per person | Potential maximum for a married couple or civil partners | Key conditions |
|---|---|---|---|
| Basic nil-rate band | £325,000 | £650,000 | The survivor must be able to claim an unused percentage from the first death where applicable. |
| Residence nil-rate band | £175,000 | £350,000 | A qualifying home or share must pass to direct descendants, and the relevant estate must meet the RNRB rules. |
| Potential total | £500,000 | £1,000,000 | This is not automatic. It depends on the facts and all relevant conditions being met. |
The RNRB applies to the estate as a whole, not only to the house. However, its availability depends on a qualifying residence interest passing to direct descendants, and it can be restricted by the value of the qualifying interest.3
Why the £2 million figure matters
The RNRB is tapered when the estate at death exceeds £2 million. For every £2 by which the estate is above £2 million, the available RNRB reduces by £1. HMRC applies this test to the estate at each death; this can affect both the allowance on that death and the percentage that may later transfer to a surviving spouse or civil partner.4
The estate value used for this taper calculation is generally assets less debts and liabilities, before deducting exemptions such as the spouse exemption and certain reliefs.4 This means that it is not enough simply to look at the value passing after a spouse exemption has been applied.
The £2.7 million illustration
Where a survivor has a potential combined RNRB of £350,000, that allowance can be fully tapered away when the survivor’s estate reaches £2.7 million. The calculation is as follows:
| Step | Illustrative calculation |
|---|---|
| Estate at the survivor’s death | £2,700,000 |
| Less taper threshold | £2,000,000 |
| Amount above the threshold | £700,000 |
| RNRB taper (£1 for every £2 over the threshold) | £350,000 |
| Potential combined RNRB lost in this illustration | £350,000 |
At the standard 40% inheritance-tax rate, losing £350,000 of available RNRB can represent up to £140,000 of additional inheritance tax when compared with an otherwise comparable situation in which that allowance remains available.5
This is a simplified illustration, not a prediction of any family’s tax bill. The result could be different where, for example, there are gifts in the previous seven years, debts, business or agricultural relief, pension death benefits, different asset ownership, previous marriages or civil partnerships, or a reduced transferable allowance from the first death.
What can happen with a straightforward “everything to spouse” Will
Assets left to a spouse or civil partner are normally exempt from inheritance tax on the first death. This can be helpful and may preserve unused basic and residence nil-rate bands for later transfer. However, it may also mean that the surviving spouse ultimately holds a larger estate.
If that survivor’s estate is above £2 million, the RNRB taper needs careful consideration. In addition, if the first person’s estate was above £2 million, the taper may already have reduced the percentage of unused RNRB that can transfer to the survivor.4
This does not mean that leaving everything to a spouse is automatically wrong. Family security, the surviving spouse’s housing needs, care needs, ownership structures, Shariah inheritance principles and the wider estate all matter. It simply means that a generic approach may not answer every question for a couple with a larger estate.
Could a different Will structure help?
There is no single solution for every family. In some cases, advisers may consider whether it is appropriate for a qualifying share in a residence to pass to direct descendants on the first death, rather than all assets passing outright to the surviving spouse. If the relevant conditions are met, this may enable an available RNRB to be used at the first death instead of relying entirely on transfer to the second death.3
That approach can have important consequences. It may affect the survivor’s interest in the home, ownership rights, flexibility, control, family relationships and the eventual distribution under Islamic inheritance principles. It must not be adopted simply because of a headline tax figure.
The type of Will and trust wording matters
A bespoke Will can be used to address a family’s circumstances and Islamic objectives. A trust may sometimes form part of that conversation, but the tax treatment depends on the detailed terms and the type of trust.
A discretionary trust should not be assumed to preserve the residence nil-rate band automatically. HMRC states that whether RNRB is available where a home is held in or transferred to a trust depends on the type of trust and the relevant conditions.3
For this reason, it is important that a Will designed with Shariah considerations is also reviewed for its legal and tax implications. A structure that supports a family’s Islamic objectives must be considered alongside the practical needs of the surviving spouse and the rules that apply at the time.
A Shariah-aware approach to estate planning
For Muslim families, inheritance planning is not only about tax. A Will should take account of Islamic inheritance principles, family responsibilities, valid debts and the position of intended beneficiaries. The tax rules do not remove the need for careful Shariah-aware drafting, and Shariah considerations should not be oversimplified to fit a tax outcome.
A properly considered discussion can help identify the questions that need answers, including the ownership of the family home, the value of other assets, whether the couple are legally married, who the direct descendants are, and how a proposed Will structure would work in practice.
When should you review your Will?
A review may be sensible if your combined family wealth is approaching or exceeds £2 million, particularly where the value of the family home has increased materially. It may also be appropriate after a major change such as a marriage, bereavement, divorce, house move, new child or grandchild, a significant gift, the purchase or sale of a business, or a change in health.
If you already have a Will, review it rather than assuming that it still meets your family’s needs. The value of assets, legislation and your personal circumstances can all change over time.
Speak to Qadar Wills
Qadar Wills helps Muslim families to discuss Islamic Will planning in a clear, respectful and practical way. For clients in Maidstone and across Kent, home visits may be available by arrangement, alongside meetings by other suitable means.
If you are concerned that your estate may be affected by the £2 million RNRB taper, arrange a discussion before changing your Will. We can help you understand the issues to consider and, where appropriate, identify when specialist legal or tax advice is needed.
Sources and further reading
The figures and rules in this article were checked against official HMRC/GOV.UK guidance available in August 2026. Tax law and HMRC guidance can change.