£325,000 nil-rate band
The standard nil-rate band is £325,000. The threshold remains frozen at this level.
Inheritance Tax
Could Inheritance Tax affect your family?
Rising property values, savings and investments can mean an estate is worth more than people realise. Changes to business and agricultural relief are already in force, and from April 2027 most unused pension funds and pension death benefits will also be brought into estates for Inheritance Tax purposes.
The basics
How Inheritance Tax works
These are some of the headline rules for the 2026/27 tax year. Your actual position can depend on the assets you own, who inherits and your wider circumstances.
Up to £175,000 residence nil-rate band
An additional residence allowance may be available where a qualifying home passes to direct descendants. The allowance is tapered for larger estates.
Spouse & civil-partner exemption
Transfers between qualifying spouses and civil partners are generally exempt from IHT. Unused nil-rate allowances may also be transferable to the survivor.
Standard rate of 40%
The standard Inheritance Tax rate is 40% on the taxable part of an estate after available exemptions, allowances and reliefs.
Business & agricultural relief changed
From 6 April 2026, a £2.5 million allowance applies to the combined value of qualifying property receiving 100% Agricultural or Business Relief. Qualifying value above the allowance normally receives 50% relief.
Pension rules change in April 2027
From 6 April 2027, most unused pension funds and pension death benefits will be included in the value of an estate for Inheritance Tax purposes.
What's changing?
Two major areas to review
Recent and forthcoming changes mean previous assumptions about business assets, farms and pensions may no longer produce the same result.
Agricultural & Business Relief
The combined value of qualifying agricultural and business property receiving relief at 100% is now subject to a £2.5 million allowance. Qualifying value above the allowance generally receives relief at 50%. Unused allowance may also be transferable between spouses or civil partners in qualifying circumstances.
Most unused pensions enter the estate
Most unused pension funds and pension death benefits will become part of the estate for IHT purposes for deaths on or after 6 April 2027. Some benefits, including qualifying death-in-service benefits, are excluded.
Try it yourself
Estimate your potential Inheritance Tax
This deliberately uses a simplified version of the core allowances. It is intended to highlight whether a proper review could be worthwhile, not calculate a tax return.
Your details
Include property, savings, investments and other assets.
Simplified estimated IHT
£0
Based only on the assumptions entered
Net estate
£0
Estimated allowance used
£0
Estimated taxable estate
£0
Illustrative rate
40%
If a tax bill arose, would your family know what to do next?
Important:
this is a simplified illustration, not tax advice or an HMRC
calculation. It does not account for all exemptions, lifetime
gifts, trusts, charitable gifts, business or agricultural
property, pension assets, domicile/residence issues, insurance,
the exact amount of transferable allowance available, or other
individual circumstances. The residence nil-rate band also has
detailed eligibility and taper rules. A professional review is
required for an accurate calculation.
Want a proper review, not just an estimate?
Talk to us about your circumstances and the estate-planning options that may be relevant.