What is the inheritance tax threshold in the UK for 2026?

The standard nil-rate band is £325,000. With the residence nil-rate band of £175,000 for passing a home to children, the effective threshold can be £500,000 per person — or £1 million for married couples.

How much inheritance tax will I pay?

IHT is charged at 40% on everything above your nil-rate bands. On a £700,000 estate with no reliefs, a single person would pay 40% of (£700,000 - £325,000) = £150,000.

Do I have to pay inheritance tax on my parents' house?

If your parents leave their home to you (a direct descendant), the residence nil-rate band applies, potentially raising the threshold to £500,000 per parent.

Can I give away money to avoid inheritance tax?

Yes — up to £3,000 per year as an annual gift exempt. Larger gifts are potentially exempt if you survive 7 years. Gifts from income that don't reduce your standard of living are also exempt.

When did IHT changes for pensions come in?

Pensions will become subject to IHT from April 2027 — meaning unused pension pots will count toward your estate.

Tax & HMRC ⏱ 2 min read 📅 Updated Apr 2026

Inheritance Tax UK 2026 — Complete Guide: Thresholds, Rates and How to Reduce IHT

Complete guide to inheritance tax UK 2026 — thresholds, rates, exempt gifts, and 10 legal ways to reduce your family's IHT bill.

Chandraketu Tripathi

Finance Editor, Kaeltripton

Published 3 Apr 2026

Last reviewed 12 Apr 2026

✓ Fact-checked

Inheritance Tax UK 2026 — Complete Guide: Thresholds, Rates and How to Reduce IHT

UK Finance Guide — 2026

This comprehensive guide covers everything you need to know about inheritance tax uk 2026 in the UK for 2026.

IHT Thresholds and Rates

Inheritance tax is charged at 40% on the value of your estate above the nil-rate band. The main thresholds for 2026/27 are:

Allowance	Amount	Notes
Nil-rate band (NRB)	£325,000	Standard threshold — no IHT below this
Residence nil-rate band (RNRB)	£175,000	For passing main home to direct descendants
Combined (individual)	£500,000	NRB + RNRB combined
Combined (married couple)	£1,000,000	Both NRBs and RNRBs transferred to survivor
IHT rate above threshold	40%	On value above nil-rate bands

What Is Included in Your Estate?

Your estate for IHT purposes includes everything you own at death:

Gifts and the 7-Year Rule

Gifts made during your lifetime can reduce your estate — but most gifts only become fully exempt if you survive 7 years after making them. Taper relief reduces the IHT on gifts made 3–7 years before death.

Years Before Death	IHT Rate on Gift
0–3 years	40%
3–4 years	32%
4–5 years	24%
5–6 years	16%
6–7 years	8%
7+ years	0% — fully exempt

Annual Exemptions and Allowances

These gifts are always exempt from IHT regardless of the 7-year rule:

✅ Key actions to take now

Read the full breakdown above for your specific situation
Use the comparison tables to find the best option for you
Check the related articles below for more detailed guidance
Bookmark this page — figures update as rates and rules change in 2026

Bottom line: Use this guide to understand your options and take action. The UK financial landscape in 2026 has changed significantly — staying informed and making proactive decisions is the difference between making the most of your money and leaving value on the table.

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By Chandraketu Tripathi · Updated April 2026 · kaeltripton.com

Editorial Disclaimer

The content on Kaeltripton.com is for informational and educational purposes only and does not constitute financial, investment, tax, legal or regulatory advice. Kaeltripton.com is not authorised or regulated by the Financial Conduct Authority (FCA) and is not a financial adviser, mortgage broker, insurance intermediary or investment firm. Nothing on this site should be construed as a personal recommendation. Rates, figures and product details are indicative only, subject to change without notice, and should always be verified directly with the relevant provider, HMRC, the FCA register, the Bank of England, Ofgem or other appropriate authority before any financial decision is made. Past performance is not a reliable indicator of future results. If you require regulated financial advice, please consult a qualified adviser authorised by the FCA. For readers outside the UK: content is written for a UK audience and may not reflect the laws, regulations or products available in your jurisdiction. Kaeltripton.com and its contributors accept no liability for any loss or damage arising from reliance on the information provided.

Chandraketu Tripathi

Finance Editor · Kaeltripton.com

22 years in global marketing and finance publishing. Specialist in UK personal finance, insurance, tax and consumer money guides.