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. The standard nil-rate band is £325,000. A qualifying estate can reach up to £500,000 where the residence conditions are met. A qualifying surviving spouse or civil partner's estate can potentially reach up to £1 million where the relevant unused percentages transfer. The qualifying home value and the £2 million taper can reduce those maximums.
Transfers between spouses and civil partners are generally exempt from IHT. The exemption can be limited in some cross-border cases where one person is a long-term UK resident and the other is not. Any unused standard or residence band is claimed later as a percentage against the survivor's estate; the two claims are separate and are not automatic cash transfers.
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 normally due by the end of the sixth month after the month in which the person died. For example, if someone dies in April 2026, payment is normally due by 31 October 2026. Interest is charged on late payments. Some tax on property and certain other assets may be paid by instalments.
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 death occurs within seven years, the gift becomes chargeable and is cumulated with earlier chargeable transfers before the death estate. It uses the available nil-rate band first; taper relief may reduce tax on a gift made 3–7 years before death where cumulative chargeable transfers exceed the available band.
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.