Estimate the IHT liability on an estate using the £325,000 nil-rate band and £175,000 residence nil-rate band. Includes taper relief and the reduced 36% charity rate.
Last updated: April 2026
Property + savings + investments + possessions, minus liabilities (debts, mortgages, funeral costs).
Required to claim the £175,000 Residence Nil-Rate Band (RNRB). Direct descendants = children, grandchildren, stepchildren, foster children.
Leaving 10%+ of the net estate to charity reduces the IHT rate from 40% to 36%.
Breakdown
UK Inheritance Tax is charged at 40% on the value of an estate above the available tax-free thresholds. The standard nil-rate band (NRB) is £325,000 per person. If a main home is left to direct descendants, an additional residence nil-rate band (RNRB) of up to £175,000 also applies, giving a maximum individual threshold of £500,000.
Married couples and civil partners can transfer any unused allowance to the surviving spouse, potentially giving a combined threshold of £1 million (£325k × 2 + £175k × 2).
| Allowance | Amount | Notes |
|---|---|---|
| Nil-rate band (NRB) | £325,000 | Per person, frozen until April 2031 |
| Residence nil-rate band (RNRB) | £175,000 | Main home → direct descendants only |
| Combined (single) | £500,000 | If home left to children |
| Combined (couple, transferable) | £1,000,000 | Maximum joint allowance |
| Standard rate | 40% | On estate above thresholds |
| Reduced charity rate | 36% | If 10%+ of net estate to charity |
| Taper threshold | £2,000,000 | RNRB tapers £1 for every £2 above |
If your estate exceeds £2 million, the residence nil-rate band is reduced by £1 for every £2 above the threshold. The RNRB is fully withdrawn for estates worth more than £2.35 million.