Answers · UK 2025/26
How much Inheritance Tax is due on a £400,000 estate?
A £400,000 estate pays £0 Inheritance Tax in 2026/27 if it includes a qualifying home left to direct descendants, since the £325,000 nil rate band plus £175,000 residence nil rate band together cover up to £500,000. Without the residence band, £75,000 would be taxed at 40% (£30,000).
Full answer
Inheritance Tax in 2026/27 is charged at 40% on the value of an estate above the available nil rate bands. Every individual has a standard nil rate band of £325,000, plus, if they own a home and leave it (or its value) to direct descendants such as children or grandchildren, an additional residence nil rate band of £175,000, giving a combined threshold of £500,000. Since £400,000 is below this combined threshold, an estate of this size that includes a qualifying home left to children pays no Inheritance Tax at all. If the estate does not include a qualifying home, or the home is left to someone other than a direct descendant, only the standard £325,000 nil rate band applies, leaving £75,000 taxable at 40%, which is £30,000 of Inheritance Tax. Married couples and civil partners can transfer any unused nil rate band to their surviving spouse, so a couple's combined threshold can reach up to £1,000,000, meaning a £400,000 estate passing to a surviving spouse first would in any case be completely exempt regardless of the residence nil rate band, since transfers between spouses are always exempt from Inheritance Tax. Use the Inheritance Tax calculator to model your estate and available allowances.
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.