The standard Inheritance Tax threshold in the UK is £325,000 per person. This is legally known as the Nil-Rate Band (NRB). Any part of an estate that exceeds available thresholds is generally taxed at a flat rate of 40%. That is the short answer. The longer answer is where things get interesting. Because the amount of inheritance tax payable depends on the value of the estate, who inherits it, whether a home qualifies for the Residence Nil Rate Band, and what planning was carried out before death. This guide explains everything about the current inheritance tax threshold.  You’ll get to know: What is the current inheritance tax threshold Inheritance tax threshold for married couples Inheritance tax when second parent dies, and Much more… Let’s get into it! What Is Inheritance Tax? Despite its name, the UK’s Inheritance Tax actually behaves like an estate tax. It is a specific type of tax imposed on the estate of a deceased person before it is transferred to their beneficiaries. Know that “estate” is just a legal term for everything you own. It includes your house, your savings accounts, your investments, and your car. It even includes your personal assets like jewellery or art. When you die, HMRC assesses the value of the deceased’s estate. Then they deduct any outstanding liabilities you may have left behind. These liabilities can include a mortgage, credit card debts, or funeral costs. After that, whatever value is left over is what gets assessed for tax. The estate is only subject to Inheritance Tax if its value exceeds the available tax-free thresholds. Your total estate value needs to cross a specific inheritance tax threshold before the estate may become liable to Inheritance Tax. So only the wealth that is above that tax-free allowance faces a bill. What Is The Inheritance Tax Threshold? The standard Inheritance Tax threshold in the UK is £325,000. This baseline is legally known as the “Nil-Rate Band.” If the total net value of your estate is under this amount, your beneficiaries won’t owe a single penny to HMRC. But anything over this £325,000 mark is generally taxed at a flat rate of 40%. However, remember that the “true” threshold is not the same for everyone. Depending on your marital status and who you leave your assets to, your personal inheritance tax threshold can easily double or even triple. For 2026/27, here’s what the inheritance tax threshold UK looks like: Allowance Amount 2026/27 Standard nil rate band £325,000 Residence nil rate band £175,000 Combined threshold (with home to descendants) £500,000 Married couple combined threshold Up to £1,000,000 Taper threshold (estates over this lose RNRB) £2,000,000 That £325,000 figure has been sitting there since April 2009 and there is not even a single penny of increase in over 16 years. And it’s not moving any time soon either. The Autumn Budget confirmed the freeze will now run until April 2031. So if you were hoping the standard inheritance tax threshold might creep up with inflation, that’s not happening for a while yet. What Is the Residence Nil Rate Band? The Residence Nil Rate Band (RNRB) was introduced to help families pass on their homes. It is worth £175,000. It is actually an extra £175,000 tax-free threshold given by the government. This means when you add this £175,000 home allowance to your standard £325,000 allowance, your personal inheritance tax threshold jumps to £500,000. But it comes with a few strict conditions. Yes, you only get this boost to your inheritance tax threshold if: You own a home (or did at some point and downsized) That home passes to direct descendants, meaning children, grandchildren, step-children or adopted children Note: Nieces, nephews, siblings, friends, and charities do not count for this particular allowance. What Is Inheritance Tax Threshold For Married Couples? For married couples in the UK, the combined Inheritance Tax threshold can be as high as £1 million tax-free. However, the exact amount depends entirely on how your estate is distributed. It also depends on who inherits your assets. When one spouse or civil partner dies, anything left to the surviving partner is completely exempt from inheritance tax. Yes. It does not matter how much it’s worth. There’s just no threshold on that transfer at all. Then, when the second partner dies, any unused portion of the first partner’s nil rate band and residence nil rate band can be transferred across. So if the first spouse used none of their allowance (because everything went to the surviving spouse), the survivor’s estate can claim both. That means: £325,000 x 2 = £650,000 standard nil rate band £175,000 x 2 = £350,000 residence nil rate band Total inheritance tax threshold for married couples: up to £1,000,000 It is worth remembering that this transfer is not at all automatic. The executors must actively claim it following the death of the second partner. They can do it by using the correct HMRC forms. If you miss this step, it can lead to losing out on hundreds of thousands of pounds of allowance that was rightfully yours. However, it is entirely avoidable with the right guidance. What Is The Inheritance Tax When A Second Parent Dies? As we just discussed, when the first parent dies and leaves everything to the surviving spouse, there’s usually no IHT to pay at that point. This means anything that is left to the surviving partner is completely exempt from inheritance tax. Inheritance Tax is assessed when the second parent dies. This is because that is when the estate actually passes down to the children. At that stage, HMRC looks at the combined nil rate bands and also at the residence nil rate bands of both parents. This is in order to determine the final inheritance tax threshold. If the family home is being left to children, and both allowances transfer properly, a couple can shelter up to £1 million before tax kicks in. And above that, it’s 40% on the excess. If you are an adult child dealing with the estate of your second parent, this is the exact moment the Inheritance …

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