The complete IHT guide — nil-rate band, residence nil-rate band, gifts and the 7-year rule, reliefs, the 2027 pension change, how to calculate and pay IHT, and planning strategies.
This guide is part of ProbateHelp's Inheritance Tax guide cluster. Estimated reading time: 22 min.
This inheritance tax guide explains the core UK IHT ideas executors usually need: the nil-rate band, residence nil-rate band, transferable allowances, gifts, reliefs, payment timing and the link between IHT and probate.
The guide is part of ProbateHelp's inheritance-tax cluster and connects to practical pages on estate valuation, IHT400 reporting, direct payment from bank accounts, HMRC clearance and pension-related IHT changes.
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No. Only estates above the available threshold pay IHT. With the standard nil-rate band of £325,000 and the residence nil-rate band of £175,000, a single person can leave up to £500,000 tax-free if they own a home and leave it to direct descendants. A married couple can combine their allowances, giving a potential IHT-free threshold of £1 million. HMRC estimates that only around 4% of UK estates pay IHT each year.
No. Transfers between spouses and civil partners who are both UK-domiciled are completely exempt from IHT, regardless of the amount. The unused nil-rate band of the first spouse to die is also transferred to the survivor’s estate, potentially doubling the threshold.
The standard IHT rate is 40% on the value of the estate above the available threshold. A reduced rate of 36% applies if you leave at least 10% of your net estate to charity.
IHT is due six months after the end of the month in which the person died. For example, if someone dies in April 2026, IHT is due by 30 September 2026. Interest is charged on late payments. IHT on property can be paid in annual instalments over 10 years.
Giving your house to your children while continuing to live in it is a ‘gift with reservation of benefit’ and does not reduce your estate for IHT purposes. The house remains in your estate until you either pay a market rent to your children or vacate the property for at least seven years. Professional advice is essential.
A potentially exempt transfer is a gift to an individual (not a trust) that becomes fully exempt from IHT if you survive seven years after making it. If you die within seven years, the gift is added back into your estate and may be subject to IHT, though taper relief reduces the tax on gifts made 3–7 years before death.
Yes, but only to your share. If you own property as joint tenants, your share passes automatically to the surviving owner and is not part of your estate for probate purposes, but it is still counted in your estate for IHT purposes. If you own as tenants in common, your share forms part of your estate and passes according to your will.
IHT400 is the main Inheritance Tax account form that executors must complete for estates that are liable for IHT, or for certain other estates that do not qualify for the excepted-estate process. It requires a detailed breakdown of all assets and liabilities, and must be submitted to HMRC before the grant of probate is issued.