Inheritance Tax thresholds
How much is the inheritance tax threshold?
The current inheritance tax threshold is £325,000 across the UK, including Scotland. Inheritance Tax is charged at 40% on the value of an estate above this threshold.
In addition to the standard nil‑rate band (NRB), many estates may benefit from the residence nil‑rate band (RNRB), an extra allowance that can apply when a main home is left to direct descendants - see our guide to the Residence nil‑rate band explained for the conditions and examples.
Important considerations
- Spouse/civil partner exemption — assets passing to a surviving spouse or civil partner are generally exempt from IHT.
- Residence nil‑rate band (RNRB) — an extra allowance may apply when a main home is left to direct descendants; tapers by £1 for every £2 where the estate exceeds £2 million.
- Business Property Relief (BPR) and Agricultural Property Relief (APR) can reduce the taxable value of qualifying assets.
- Charitable giving — leaving 10% or more of the net estate to charity can reduce the IHT rate from 40% to 36%.
- Lifetime gifts — gifts can be effective for IHT planning, but the 7‑year rule and specific exemptions (such as annual exemption, normal expenditure out of income) may apply; the treatment depends on individual circumstances.
- Pensions and death benefits (from 6 April 2027) — most unused pension funds and certain death benefits will be included in the estate for IHT, with some exclusions; personal representatives will have new reporting/payment responsibilities.
Our Inheritance Tax (IHT) calculator can help assess an individual's potential IHT position based on their assets and liabilities.
| Tax rate | 0% | 40% |
| 2026/27* | £0-325,000 | £325,001 and over |
| 2025/26* | £0-325,000 | £325,001 and over |
| 2024/25* | £0-325,000 | £325,001 and over |
| 2023/24* | £0-325,000 | £325,001 and over |
| 2022/23* | £0-325,000 | £325,001 and over |
| 2021/22* | £0-325,000 | £325,001 and over |
| 2020/21* | £0-325,000 | £325,001 and over |
| 2019/20* | £0-325,000 | £325,001 and over |
| 2018/19* | £0-325,000 | £325,001 and over |
| 2017/18* | £0-325,000 | £325,001 and over |
| 2016/17* | £0-325,000 | £325,001 and over |
| 2015/16* | £0-325,000 | £325,001 and over |
| 2014/15* | £0-325,000 | £325,001 and over |
| 2013/14* | £0-325,000 | £325,001 and over |
| 2012/13* | £0-325,000 | £325,001 and over |
| 2011/12 | £0-325,000 | £325,001 and over |
| 2010/11 | £0-325,000 | £325,001 and over |
| 2009/10 | £0-325,000 | £325,001 and over |
| 2008/09 | £0-312,000 | £312,001 and over |
| 2007/08 | £0-300,000 | £300,001 and over |
| 2006/07 | £0-285,000 | £285,001 and over |
| 2005/06 | £0-275,000 | £275,001 and over |
| 2004/05 | £0-263,000 | £263,001 and over |
| 2003/04 | £0-255,000 | £255,001 and over |
| 2002/03 | £0-250,000 | £250,001 and over |
| 2001/02 | £0-242,000 | £242,001 and over |
* For deaths on or after 6 April 2012, a lower rate of Inheritance tax of 36% will apply where 10% or more of the deceased person's net estate is left to charity.
Further information
Disclaimer
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.