Freedom Isn’t Free UK Personal Finance
Tax Planning
Inheritance Tax UK: The 2026/27 Complete Guide
HMRC will pull a record £9bn a year in Inheritance Tax by the late 2020s. The thresholds haven't moved since 2009. One April 2027 change makes it worse.
IHT thresholds 2026/27
| Estate type | Nil-rate band | Residence band | Total threshold |
|---|---|---|---|
| Single, no home | £325,000 | £0 | £325,000 |
| Single, home to children | £325,000 | £175,000 | £500,000 |
| Married, no home | £650,000 | £0 | £650,000 |
| Married, home to children | £650,000 | £350,000 | £1,000,000 |
Frozen since 2009. 40% IHT applies on the excess above whichever threshold fits.
Key takeaways
1
Estates above £325,000 (or £500,000 with the residence band) face IHT at 40% on the excess
2
A married couple passing the family home to direct descendants can shelter up to £1 million combined
3
Gifts more than 7 years before death are fully exempt; the £3,000 annual exemption and surplus-income rules are the most underused tools
4
Defined contribution pensions sit outside the estate for IHT in 2026/27, but this changes from April 2027