Inheritance Tax: nil-rate bands and standard rate
The ordinary nil-rate band and residence nil-rate band are distinct. A published maximum residence band is conditional, and the standard rate applies to the taxable estate above the applicable threshold.
- Nil-rate band
- £325,000 in the published interval covering 2026–27.
- Residence nil-rate band
- Up to £175,000 in the published interval covering 2026–27, subject to eligibility.
- Standard estate rate
- 40% on the part above the applicable threshold.HMRC, Inheritance Tax
Published bands
HMRC’s threshold table gives an ordinary nil-rate band of £325,000 and a residence nil-rate band of £175,000 in the published intervals covering 2026–27. These are statutory thresholds, not values chosen by an executor or a property lender. HMRC, Inheritance Tax thresholds (opens in a new tab).
The residence band is an additional conditional threshold. It is not automatically available to every estate that includes a property. HMRC, Passing on a home (opens in a new tab).
Residence conditions
GOV.UK describes a threshold up to £500,000 where a home or share of a home passes to children or grandchildren and the estate is worth less than £2 million. The published maximum is not a universal exemption. HMRC, Passing on a home (opens in a new tab).
The ordinary threshold and residence conditions describe different parts of the rules. Owning a home by itself does not establish that the additional threshold applies. HMRC, Passing on a home (opens in a new tab).
Rate and limits of this explanation
The standard Inheritance Tax rate is 40%, charged on the part of the estate above the applicable threshold. GOV.UK also describes exemptions, reliefs and a reduced charity-related rate; the standard rate does not settle every estate’s liability. HMRC, Inheritance Tax (opens in a new tab).
Unused thresholds may transfer between spouses or civil partners under the published rules. This page does not assess transfers, gifts, trusts, reliefs or the tax due on a particular estate. HMRC, Inheritance Tax (opens in a new tab).
This is general information adapted from HMRC material under the Open Government Licence v3.0, without endorsement. No matching UK inheritance-tax calculator or worked tax calculation is available here. The page gives published thresholds and conditions, not estate-planning advice. HMRC, Inheritance Tax thresholds (opens in a new tab).