The Key IHT Thresholds 2026
| Allowance | Amount | Who qualifies |
|---|---|---|
| Nil Rate Band (NRB) | £325,000 | Everyone — frozen until 2030 |
| Residence Nil Rate Band (RNRB) | £175,000 | Where main home passes to direct descendants |
| Combined (individual) | £500,000 | Single person leaving home to children |
| Combined (couple) | £1,000,000 | Married couple leaving home to children |
💡 The freeze matters. The NRB has been stuck at £325,000 since April 2009. With average house prices rising significantly, far more estates now breach the threshold than did 15 years ago.
How Couples Can Double the Threshold
When the first spouse dies and leaves everything to the surviving spouse, no IHT is payable (spouse exemption is unlimited for UK-domiciled spouses). Crucially, the unused nil rate band transfers to the survivor. The surviving spouse can therefore have:
- Their own NRB: £325,000
- Transferred NRB from deceased spouse: £325,000
- Their own RNRB: £175,000
- Transferred RNRB: £175,000
- Total: £1,000,000
The RNRB Taper
The Residence Nil Rate Band is tapered for estates over £2,000,000. For every £2 over this threshold, the RNRB is reduced by £1. At £2,350,000 the RNRB is eliminated entirely. For very large estates, different strategies apply.
What Happens Above the Threshold
Everything above the available nil rate bands is taxed at 40%. On an estate of £750,000 with a combined threshold of £650,000, IHT would be £40,000 (£100,000 at 40%).
Reducing the estate below the threshold through gifting, trusts, and proper Will planning can eliminate this liability entirely.
Reduce Your IHT Exposure
A Will structured to use all available thresholds. IHT planning that actually works. Clear Legacy from £69.
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