How much Inheritance Tax is due on a £800,000 estate?

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 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 £800,000 estate with a qualifying home left to children, £300,000 exceeds this threshold, so Inheritance Tax of 40% x £300,000 = £120,000 is due. Without the residence nil rate band, only the £325,000 standard band applies, leaving £475,000 taxable at 40%, a bill of £190,000 -- £70,000 more. Note the residence nil rate band also tapers away for estates above £2,000,000 (reducing by £1 for every £2 over that threshold), which does not affect an £800,000 estate but is worth knowing if the estate might grow before death. Married couples can transfer any unused nil rate band to their surviving spouse, so a couple's combined threshold can reach £1,000,000, meaning an £800,000 estate passing to a spouse first, then children on the second death, could potentially owe nothing if both nil rate bands and both residence nil rate bands are fully available. Use the Inheritance Tax calculator to model your specific estate and reliefs.

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More answers

• How much Inheritance Tax is due on a £700,000 estate?
• How much Inheritance Tax is due on a £900,000 estate?