How much Inheritance Tax is due on a £900,000 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, an additional residence nil rate band of £175,000, giving a combined threshold of £500,000. On a £900,000 estate with a qualifying home left to children, £400,000 exceeds this threshold, so Inheritance Tax of 40% x £400,000 = £160,000 is due for a single person's estate. However, married couples and civil partners can transfer any unused nil rate band and residence nil rate band to their surviving spouse, taking the combined threshold to £1,000,000. Since spousal transfers are always exempt from Inheritance Tax, a £900,000 estate left entirely to a surviving spouse first would owe nothing, with the full £1,000,000 combined allowance then available against the estate on the second death (subject to the value of the estate at that later point). This illustrates why the timing and structure of a will matters enormously for larger estates -- leaving everything outright to a spouse defers tax but does not necessarily minimise the total family tax bill across both deaths. Use the Inheritance Tax calculator and consider professional advice for estates approaching £1,000,000.

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More answers

• How much Inheritance Tax is due on a £800,000 estate?
• How much Inheritance Tax is due on a £1,000,000 estate?