Answers · UK 2025/26
How much Inheritance Tax is due on a £600,000 estate?
A £600,000 estate left to children with a qualifying home pays £40,000 Inheritance Tax in 2026/27, since only £100,000 exceeds the combined £500,000 threshold (£325,000 nil rate band plus £175,000 residence nil rate band). Without the residence band, £275,000 would be taxable, giving a £110,000 tax bill.
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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. Every individual has a standard nil rate band of £325,000, plus, if they own a home and leave it to direct descendants such as children or grandchildren, an additional residence nil rate band of £175,000, giving a combined threshold of £500,000. On a £600,000 estate with a qualifying home left to children, £100,000 exceeds this threshold, so Inheritance Tax of 40% x £100,000 = £40,000 is due. If the estate does not include a qualifying home, or it is left to someone other than a direct descendant such as a sibling or unmarried partner, only the standard £325,000 nil rate band applies, leaving £275,000 taxable at 40%, a bill of £110,000 -- £70,000 more than with the residence band available. Married couples and civil partners can transfer any unused nil rate band to their surviving spouse, so a couple's combined threshold can reach £1,000,000, meaning a £600,000 estate passing entirely to a surviving spouse and then to children on the second death could use both partners' allowances and potentially owe nothing. Leaving at least 10% of the net estate to charity cuts the IHT rate from 40% to 36% on the rest. Use the Inheritance Tax calculator to model your estate.
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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.