UK Inheritance Tax Planning Guide 2026
Estimate your IHT liability instantly and discover proven, legal strategies to protect your wealth and reduce the tax burden on your beneficiaries.
Estimate Your IHT Liability
Enter your estimated estate value and applicable allowances below to instantly calculate your potential Inheritance Tax bill for the 2026/27 tax year.
IHT Liability Estimator
Calculate your potential tax bill based on current thresholds.
How to Reduce IHT Legally
Proven strategies for estate planning
Spousal Exemption
Assets passed to a UK-domiciled spouse or civil partner are entirely free from IHT. Unused Nil Rate Bands can also be transferred to the surviving partner.
The 7-Year Rule
Lifetime gifts are ‘Potentially Exempt Transfers’. If you survive for 7 years after making the gift, it falls completely outside of your estate for IHT purposes.
Annual Exemptions
You can give away £3,000 per tax year without it being added to your estate. You can also make regular gifts out of your surplus income without incurring IHT.
Life Insurance in Trust
Writing a life insurance policy in trust ensures the payout goes directly to your beneficiaries and does not form part of your taxable estate.
IHT Allowances & Rates 2026/27
Current thresholds and tax rates for Inheritance Tax planning in the UK.
| Allowance / Rate | Amount | Condition |
|---|---|---|
| £325,000 | Standard Nil Rate Band (NRB) per person | |
| £175,000 | Residence Nil Rate Band (RNRB) if leaving home to direct descendants | |
| £500,000 | Total combined allowance per person (NRB + RNRB) | |
| £1,000,000 | Total combined allowance for a married couple / civil partners | |
| 40% | Standard IHT rate on value above the thresholds | |
| 36% | Reduced rate if 10% or more of the net estate is left to charity |
Inheritance Tax FAQ
Answers to the most frequently asked questions about UK estate planning and IHT rules.
For the 2026/27 tax year, the standard Nil Rate Band (NRB) is £325,000. If you leave your main home to direct descendants (children or grandchildren), you may also claim the Residence Nil Rate Band (RNRB) of £175,000. This brings the total tax-free allowance to £500,000 per person, or £1,000,000 for a married couple or civil partners.
Gifts made during your lifetime are considered ‘Potentially Exempt Transfers’ (PETs). If you survive for 7 full years after making the gift, it is completely free from Inheritance Tax. If you die within 7 years, the gift may be subject to IHT on a sliding scale known as ‘taper relief’, depending on how many years have passed.
Yes. Common legal strategies include utilising your £3,000 annual exemption, making regular gifts out of surplus income, leaving at least 10% of your net estate to charity (which reduces the IHT rate from 40% to 36%), and ensuring life insurance policies are written in trust.
No. Transfers of assets between UK-domiciled spouses or civil partners are generally entirely exempt from Inheritance Tax, regardless of the value. Furthermore, any unused Nil Rate Band and Residence Nil Rate Band can be transferred to the surviving spouse upon their death.
Generally, no. Most modern pension pots (like Defined Contribution schemes) are held in trust and do not form part of your estate for IHT purposes. If you die before age 75, they can usually be passed on entirely tax-free. If you die after 75, beneficiaries pay income tax on withdrawals, but still no IHT.