What is the IHT nil-rate band?

Every individual has a nil-rate band (NRB) of £325,000 — the portion of the estate that is exempt from IHT. Unused NRB can be transferred to a surviving spouse.

What is the residence nil-rate band?

The RNRB is an additional £175,000 allowance available when a main residence is passed to direct descendants (children or grandchildren). Combined with the NRB, a couple can shelter up to £1 million.

Are gifts made before death subject to IHT?

Chargeable gifts made within 7 years of death use up the nil-rate band first. Gifts to individuals are exempt after 7 years (potentially exempt transfers, or PETs).

Inheritance Tax Calculator 2026/27

Estimate the IHT payable on an estate using the standard nil-rate band (£325,000) and residence nil-rate band (£175,000 where applicable). IHT is charged at 40% on the taxable estate.

How it's calculated

Taxable estate = Estate value − Nil-rate band − RNRB − Chargeable gifts
IHT = Taxable estate × 40%

Frequently Asked Questions

What is the IHT nil-rate band?: Every individual has a nil-rate band (NRB) of £325,000 — the portion of the estate that is exempt from IHT. Unused NRB can be transferred to a surviving spouse.
What is the residence nil-rate band?: The RNRB is an additional £175,000 allowance available when a main residence is passed to direct descendants (children or grandchildren). Combined with the NRB, a couple can shelter up to £1 million.
Are gifts made before death subject to IHT?: Chargeable gifts made within 7 years of death use up the nil-rate band first. Gifts to individuals are exempt after 7 years (potentially exempt transfers, or PETs).