Answers · UK 2025/26
How much Inheritance Tax is due on a £1,500,000 estate?
A £1,500,000 estate left to children with a qualifying home pays £400,000 Inheritance Tax in 2026/27 for a single person (£1,000,000 taxable above the £500,000 threshold). A married couple with a combined £1,000,000 threshold would pay £200,000 instead, on £500,000 taxable.
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Inheritance Tax in 2026/27 is charged at 40% on the value of an estate above the available nil rate bands. A single person has a standard nil rate band of £325,000, plus a residence nil rate band of £175,000 if a qualifying home passes to direct descendants, giving a combined threshold of £500,000. On a £1,500,000 estate, £1,000,000 exceeds this threshold, so a single person's estate would owe 40% x £1,000,000 = £400,000. Married couples and civil partners can transfer unused nil rate bands to the surviving spouse, doubling the combined threshold to £1,000,000. On the same £1,500,000 estate, £500,000 would then exceed the doubled threshold, giving a bill of 40% x £500,000 = £200,000 -- half the single-person figure. Note that the residence nil rate band begins tapering away for estates above £2,000,000, reducing by £1 for every £2 over that threshold, so an estate approaching that level should model the taper carefully as it can eliminate the residence band entirely by around £2,350,000. Leaving at least 10% of the net estate to charity cuts the rate on the rest from 40% to 36%. Lifetime gifting, trusts and Business or Agricultural Property Relief (where applicable) can all reduce the bill further -- professional advice is strongly recommended for estates at this level.
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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.