What is the inheritance tax threshold?
The main inheritance tax threshold — the nil-rate band — is £325,000. Below this, no inheritance tax is due. On top, a residence nil-rate band of up to £175,000 applies when your home passes to children or grandchildren. Both are frozen until April 2031. A married couple can combine allowances to pass on up to £1m tax-free.
Detailed explanation
“Threshold” usually means the nil-rate band, but two allowances stack for most families.
- £325,000 standard nil-rate band, per person.
- + £175,000 residence nil-rate band when a home goes to direct descendants (tapered away for estates over £2m).
- Transferable: a surviving spouse or civil partner inherits the unused percentage of both bands.
A widow whose late husband used none of his allowances can combine both bands: £325,000 + £325,000 + £175,000 + £175,000 = £1,000,000 tax-free when her home passes to the children.
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Sources
- GOV.UK — How Inheritance Tax works: thresholds, rules and allowances
- GOV.UK — Inheritance Tax: residence nil rate band
- HMRC — Inheritance Tax statistics 2024/25
- Reviewed by
- ClearLegacy editorial team
- Last reviewed
- June 2026
- Next review
- December 2026
- Jurisdiction
- England & Wales
Frequently asked questions
What is the inheritance tax threshold in the UK?
The nil-rate band is £325,000 per person. A residence nil-rate band of up to £175,000 applies on top when a home passes to direct descendants. Both are frozen until April 2031, and a couple can combine them to pass on up to £1m tax-free.
Is the inheritance tax threshold frozen?
Yes. Both the £325,000 nil-rate band and the £175,000 residence nil-rate band are frozen until April 2031, meaning more estates may be drawn into inheritance tax over time as asset values rise.
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