Frequently asked questions
What is the Inheritance Tax threshold in 2026/27?
The nil-rate band is £325,000 per person, frozen until April 2031. On top, a residence nil-rate band of £175,000 applies when you leave your main home to direct descendants. A married couple can combine both, passing on up to £1 million tax-free.
What is the residence nil-rate band?
An extra £175,000 allowance that applies when your main home passes to children, grandchildren or other direct descendants. It is reduced by £1 for every £2 that your estate exceeds £2 million, disappearing entirely at £2.35m (or £2.7m for a couple).
How does the spouse transfer work?
When the first spouse or civil partner dies, any unused nil-rate band and residence band pass to the survivor. If fully unused, the survivor has £650,000 plus £350,000 — up to £1 million with a home left to descendants.
What is the Inheritance Tax rate?
40% on the value of the estate above your available allowances. If you leave at least 10% of your net estate to charity, the rate on the rest falls to 36%.
Are pensions subject to Inheritance Tax?
From April 2027, unused pension pots are expected to be brought within the estate for Inheritance Tax. Until then most pensions sit outside IHT. Business and agricultural property relief are also being reformed from April 2026.
Does this replace professional advice?
No. This is a free, independent educational estimate. Reliefs, exemptions and lifetime gifts can change the figure significantly. Check GOV.UK and speak to a solicitor or tax adviser.