UK estate figures › Inheritance tax threshold

Inheritance tax · nil-rate band

£325,000per person · frozen until April 2031

The amount of an estate that passes free of inheritance tax — plus up to £175,000 more when a home is left to children or grandchildren.

Verified against GOV.UK on 27 Oct 2026

Figure history

25 Jun 2026 — Inheritance tax threshold freeze — end date: Frozen until April 2030 → Frozen until April 2031 · GOV.UK — Inheritance Tax ↗

The freeze on the nil-rate band and residence nil-rate band was extended by one further tax year at the Autumn Budget 2025; corrected in our figures 25 June 2026.

§1What it means

Most estates pay nothing — the threshold is high, and it doubles for couples.

Every person can pass on £325,000 before any inheritance tax is due. If they leave their home to direct descendants, a further £175,000 residence nil-rate band can apply. Anything above the available bands is taxed at 40%.

Crucially, anything unused passes to a surviving spouse or civil partner. So a married couple can leave up to £1,000,000 between them before inheritance tax bites — which is why only about 4.7% of estates pay any at all.

Worked example

A widow leaves an estate of £820,000, including the family home, to her two children.

She inherited her late husband's full unused bands. Her available thresholds: her own £325,000 + his transferred £325,000 + two residence bands of £175,000 each = £1,000,000.

Her estate is below that — so no inheritance tax is due. The transfer is claimed on form IHT402.

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§2Common questions

The threshold, answered.

The basic inheritance tax threshold (the nil-rate band) is £325,000 per person, frozen until April 2031.

A residence nil-rate band of up to £175,000 can apply on top when a home is left to direct descendants.

Yes.

Any unused nil-rate band transfers to the surviving spouse or civil partner, so a couple can pass on up to £1,000,000 between them once both the nil-rate band and the residence nil-rate band are combined — claimed on form IHT402 (and IHT436 for the residence band).

Anything above the available thresholds is taxed at 40%, falling to 36% if at least 10% of the net estate is left to charity.

Only around 4.7% of estates pay any inheritance tax at all.

§3Related next steps

Informational, not advice. Confirm against GOV.UK before acting. Figure verified 27 Oct 2026.

Cite this figure: Valoren, “Inheritance Tax Threshold,” https://valoren.uk/figures/inheritance-tax-threshold (verified 27 Oct 2026).

Figures checked against gov.uk 27 OCT 2026 · The Figure Watch