Pick an estate value
IHT at a glance
| Estate | Single, home to children | Couple, 2nd death |
|---|---|---|
| £400,000 estate | £0 | £0 |
| £500,000 estate | £0 | £0 |
| £600,000 estate | £40,000 | £0 |
| £700,000 estate | £80,000 | £0 |
| £750,000 estate | £100,000 | £0 |
| £800,000 estate | £120,000 | £0 |
| £900,000 estate | £160,000 | £0 |
| £1,000,000 estate | £200,000 | £0 |
| £1,250,000 estate | £300,000 | £100,000 |
| £1,500,000 estate | £400,000 | £200,000 |
| £2,000,000 estate | £600,000 | £400,000 |
| £2,500,000 estate | £870,000 | £700,000 |
| £3,000,000 estate | £1,070,000 | £940,000 |
Assumes a qualifying home worth at least the residence band, outright to direct descendants, no lifetime gifts or reliefs. Bands per GOV.UK: £325,000 NRB, £175,000 RNRB, 40% rate, RNRB tapered £1 per £2 above £2m.
How the system fits together
Inheritance tax looks simple — 40% above the allowances — but the allowances do all the work. Everyone has a £325,000 nil-rate band, frozen since 2009. Passing a home to children or grandchildren adds the £175,000 residence nil-rate band. Spouses and civil partners inherit from each other tax-free and pass unused bands to the survivor, so a typical couple shelters £1 million on the second death. Above £2 million, the residence band tapers away at £1 per £2, briefly pushing the marginal rate to 60%.
Frozen thresholds plus rising asset prices mean estates drift into the net without anyone feeling richer — the same fiscal-drag mechanism that pulls salaries into higher income tax bands under the 2025/26 thresholds frozen to 2028. For context, the ONS puts the median 65 to 74 household's net worth at about £502,500 (see net worth at 65) — already above the single person's £500,000 ceiling.
These pages give worked answers for a specific estate value; for your own mix of property, gifts, charity legacies and reliefs, use the interactive inheritance tax calculator. And note the April 2027 change: unused pension funds join the estate for IHT under the Finance Act 2026 — plans that lean on pensions as an IHT shelter need a rethink before then.
Frequently asked questions
How much can I leave without paying inheritance tax?
£325,000 for anyone; £500,000 for a single person leaving a home to direct descendants; up to £1,000,000 for a married couple or civil partnership using both sets of allowances on the second death. All 2025/26 figures, frozen — the Autumn Statement 2025 extended the freeze to 2030/31.
What rate is inheritance tax charged at?
40% on the value above your allowances, reduced to 36% if at least 10% of the net estate goes to charity. The residence nil-rate band tapers away at £1 for every £2 the estate exceeds £2 million, creating a 60% effective marginal band.
Are pensions subject to inheritance tax?
Mostly not yet — but from 6 April 2027 unused pension funds and death benefits are included in the estate for IHT, under changes legislated in the Finance Act 2026.
Model your own estate
Inheritance tax calculator →