Inheritance Tax UK: The 2026/27 Complete Guide

Estates above £325,000 (or £500,000 with the residence band) face IHT at 40% on the excess

A married couple passing the family home to direct descendants can shelter up to £1 million combined

Gifts more than 7 years before death are fully exempt; the £3,000 annual exemption and surplus-income rules are the most underused tools

Defined contribution pensions sit outside the estate for IHT in 2026/27, but this changes from April 2027