Answers · UK 2025/26
How much is Inheritance Tax in the UK for 2026/27?
Inheritance Tax is 40% on the estate above available thresholds. The Nil Rate Band is £325,000 per person; the Residence Nil Rate Band adds £175,000 when a home passes to direct descendants. A couple can potentially shelter £1 million. The rate is 36% if at least 10% of the estate is left to charity.
Full answer
UK Inheritance Tax (IHT) is charged at 40% on the value of a deceased person's estate above the available nil-rate bands, subject to reliefs and exemptions. For 2026/27, the key thresholds are: Nil Rate Band (NRB): £325,000 per person (frozen at this level until at least April 2028). Residence Nil Rate Band (RNRB): £175,000 additional allowance when a qualifying residential property is left to direct descendants (children, grandchildren). This tapers away by £1 for every £2 that the estate exceeds £2,000,000. Both bands can be transferred between spouses/civil partners — so a surviving spouse inherits any unused proportion of their deceased partner's NRB and RNRB. This means a couple can shelter up to £650,000 (2× NRB) or up to £1,000,000 (2× NRB + 2× RNRB) from IHT if a home passes to descendants. The 36% reduced rate applies if 10% or more of the net estate (above thresholds) is left to charity. Agricultural Property Relief (APR) and Business Property Relief (BPR) can reduce the taxable value of qualifying assets by 50% or 100%. From April 2027, pension funds are proposed to form part of the estate for IHT — a major change currently under consultation. Gifts made more than 7 years before death are generally exempt from IHT (the 7-year rule), subject to tapering relief between years 3–7. Annual gift exemption: £3,000/year; small gifts exemption: £250/year per recipient.
Try the calculator
More answers
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.