My estate is worth £1m
In short
A married couple or civil partners can often pass up to £1 million tax-free by combining two £325,000 nil-rate bands and two £175,000 residence bands (when a home passes to direct descendants). A single person with a £1 million estate has up to £500,000 of allowances, leaving around £500,000 taxed at 40% — roughly £200,000.
The situation
Your estate is worth around £1 million and you want to understand the inheritance tax exposure.
What happens legally
The outcome depends heavily on whether allowances can be doubled (figures current for 2026):
- Each person has a £325,000 nil-rate band and a £175,000 residence nil-rate band (if a home passes to direct descendants).
- Married couples and civil partners can transfer unused allowances, so the survivor can have up to £1 million of combined thresholds.
- A single individual has up to £500,000 of allowances; £1,000,000 − £500,000 = £500,000 taxed at 40% ≈ £200,000.
- Estates over £2 million start to lose the residence nil-rate band through tapering.
The risks
- A single person, widow(er) without transferred allowances, or an estate without a qualifying home can face a large bill.
- Failing to claim a deceased spouse's transferable allowances wastes up to £500,000 of relief.
- Frozen thresholds (to April 2031) mean more £1m estates become taxable over time.
Recommended actions
- Establish whether you can use one or two sets of allowances.
- Ensure a will leaves a qualifying home to direct descendants to capture the residence band.
- Claim any transferable nil-rate band from a deceased spouse.
- Consider lifetime gifting, trusts or charitable legacies with specialist advice.
Sources
- Inheritance Tax Act 1984 — legislation.gov.uk
- GOV.UK — Inheritance Tax: thresholds, transferable allowances, RNRB taper
- HMRC — Transferable nil-rate band guidance
- Reviewed by
- ClearLegacy editorial team
- Last reviewed
- June 2026
- Next review
- December 2026
- Jurisdiction
- England & Wales
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