Tax When Someone Dies: A UK Guide for 2026/27

Quick answer

When someone dies in the UK, three taxes can apply: inheritance tax (IHT) on the estate above GBP 325,000 (plus up to GBP 175,000 if a home passes to children), income tax on income earned before and after death, and capital gains tax if executors sell assets that have gained value. IHT is usually due within six months.

This guide explains each tax in turn, who is responsible, and the deadlines that matter most. It uses verified 2026/27 figures. For anything outside those figures - particularly the detailed mechanics of probate fees or pension death benefits - we describe the mechanism and point you to gov.uk, because the sums are large and mistakes are costly.

Who is responsible for the tax

The person who deals with the estate is the personal representative. If the deceased left a valid will, this is the executor named in it. If there is no will, an administrator is appointed under the rules of intestacy. In Scotland the equivalent process is called confirmation rather than probate, and some terminology differs.

The personal representative is responsible for valuing the estate, reporting it to HMRC where required, paying any tax due, and distributing what remains to the beneficiaries. They are personally accountable for getting it right, which is why many executors of larger estates use a solicitor.

Inheritance tax: the main event

Inheritance tax is charged on the value of a person's estate when they die - their property, money, investments and possessions, less debts and certain reliefs. For 2026/27 the key figures are:

The nil-rate band is the amount that can pass free of IHT. The residence nil-rate band is an extra slice available when a main home is left to direct descendants such as children, stepchildren or grandchildren. It tapers away for very large estates and carries conditions, including a downsizing provision, so check the detailed rules on gov.uk before relying on it.

Spouses, civil partners and the GBP 1 million figure

Transfers between spouses and civil partners are generally exempt from IHT. On top of that, when the first partner dies, any unused nil-rate band and residence nil-rate band can be transferred to the survivor. This is how a married couple can potentially pass on up to GBP 1 million free of inheritance tax: GBP 325,000 plus GBP 175,000 each, where the home passes to children.

That GBP 1 million is a best case. It depends on the home being left to direct descendants, the estate not being so large that the RNRB tapers away, and the bands not having been used by lifetime gifts. Estimate your own position with the dedicated calculator rather than assuming the headline number applies.

The charity rate

If 10 percent or more of the net estate is left to charity, the IHT rate on the rest of the taxable estate falls from 40 percent to 36 percent. For some estates this can mean giving more to good causes while leaving beneficiaries little or no worse off. The calculation of the 10 percent baseline is technical, so take advice before structuring a will around it.

Gifts made before death

Gifts made in the seven years before death can be drawn back into the IHT calculation. Many such gifts are "potentially exempt transfers" that fall out of account if the giver survives seven years; otherwise a tapering charge can apply. There are also annual and small-gift exemptions. The rules are detailed and change periodically, so confirm the current position on gov.uk rather than relying on rules of thumb.

Income tax around the date of death

Income tax does not stop at death. It splits into two periods.

First, there is the income the deceased received up to the date of death - salary, pension, interest and so on. This is settled through a final calculation or tax return. The deceased still has their Personal Allowance of GBP 12,570 for the part-year, and the normal bands apply: 20 percent basic rate on gross income from GBP 12,571 to GBP 50,270, 40 percent higher rate to GBP 125,140, and 45 percent above that. Scotland has its own rates and bands, from a 19 percent starter rate up to a 48 percent top rate.

Second, there is income the estate itself receives during administration - interest on bank accounts, dividends, or rent collected before assets are distributed. The estate is taxable on this income. Beneficiaries may then have further tax to account for, or a refund to claim, depending on their own marginal rates once the income is passed on.

Remember that the Personal Allowance tapers away by GBP 1 for every GBP 2 of income above GBP 100,000, vanishing entirely at GBP 125,140. To sanity-check a final-year position, the income tax calculator is a useful starting point.

Capital gains tax: the death uplift

There is no capital gains tax simply because someone has died. Instead, assets are treated as acquired by the estate at their market value on the date of death. This "uplift" resets the base cost, so any gain that built up during the person's lifetime is wiped out for CGT purposes.

CGT only becomes relevant if the executors later sell assets that have grown in value since the date of death. For 2026/27 the annual exempt amount is GBP 3,000. Rates are 18 percent for gains falling within the basic-rate band and 24 percent for higher gains, with Business Asset Disposal Relief charged at 18 percent where it applies.

In practice, executors often sell soon after death when prices have not moved much, so a CGT charge is avoided or small. But for property and investments held during a long administration, gains can build. Model a disposal before you sell.

Deadlines and how the tax is paid

Inheritance tax has a tight timetable. It is generally due by the end of the sixth month after the month of death. If someone dies in January, for instance, IHT is usually due by 31 July. Interest runs on anything paid late, so executors should not wait until probate is granted to start arranging payment.

A practical difficulty is that probate often cannot be granted until IHT has been paid, yet the money to pay it may be locked inside the estate. Common solutions include the Direct Payment Scheme, which lets banks release funds straight to HMRC, paying tax on some assets such as property by instalments over up to ten years (interest still applies), or executors borrowing to cover the bill.

A simple checklist for executors

1. Register the death and obtain copies of the death certificate.
2. Locate the will and confirm who the executors are.
3. Value the estate - property, accounts, investments, possessions, and debts.
4. Work out whether IHT is due and report the estate to HMRC where required.
5. Pay any inheritance tax, using instalments or the Direct Payment Scheme if needed.
6. Apply for probate (or confirmation in Scotland).
7. Settle the deceased's final income tax position and any tax on estate income.
8. Watch for capital gains tax on assets sold during administration.
9. Pay debts, then distribute the remaining estate to beneficiaries.
10. Keep full records in case HMRC asks questions later.

Estates that are small, or where assets pass automatically to a surviving joint owner, may need far fewer of these steps. Larger estates with business assets, trusts or overseas property need professional help.

What this guide does not cover

Some figures change frequently or depend on devolved rules, and we will not guess at them. Probate application fees, the precise mechanics of pension death benefits, trust taxation, and the treatment of agricultural or business property reliefs all sit outside the verified figures used here. For those, go to gov.uk or speak to a solicitor or chartered tax adviser. Given that IHT bills routinely run into tens of thousands of pounds, the cost of advice is usually small by comparison.

For everyday estimates - the likely IHT exposure, a final-year income tax position, or a possible capital gains charge on a sale - the calculators linked above will give you a quick, figure-based starting point before you commit to a professional.