UK Inheritance Tax, in plain English

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Inheritance Tax is the tax on the estate of someone who has died — their home, money and possessions. Most estates pay nothing: the tax only starts above a £325,000 threshold, and more than 93% of estates are forecast to have no liability in each of the next five years. These eleven guides explain, in plain English, when tax is due, how much, and how it is paid — with every figure taken from GOV.UK or HMRC.

Start here

The threshold is £325,000 per person, frozen until 5 April 2031. The tax rate is 40% on the part of the estate above the threshold — never on the whole estate. A home left to children or grandchildren can add up to £175,000 more tax-free, taking a single person's total to £500,000 and a couple's to £1,000,000. And from 6 April 2027, most unused pension funds count as part of the estate for the first time.

The basics

Inheritance Tax Explained: Thresholds, Rates, and Who Pays — what IHT is, the 40% rate, the 36% charity rate, and the frozen thresholds.
The Nil-Rate Band and Residence Nil-Rate Band: £325,000 + £175,000 — the two tax-free bands, the £500,000 and £1,000,000 totals, and the £2 million taper.
The 7-Year Rule: Gifts, PETs, and Taper Relief — when lifetime gifts escape tax, and the taper rates from 40% down to 0%.
Inheritance Tax on Property and the Family Home — how the home is treated, giving it away during life, and paying in instalments.

Pensions, trusts and reliefs

Pensions and Inheritance Tax from April 2027 — the biggest change in years: unused pension funds come into the estate, and who it affects.
Inheritance Tax on Trusts: Charges, 10-Year Anniversaries, and Exit Charges — the 20% entry charge, the 6% periodic and exit charges, and bare trusts.
Business Relief and Agricultural Relief: Passing On a Business or Farm — the £2.5 million cap from 6 April 2026, and who still qualifies.

Paying and planning

Paying Inheritance Tax: Probate, Deadlines, and Paying in Instalments — the 6-month deadline, the Direct Payment Scheme, and 10-year instalments.
Inheritance Tax Planning: Gifts, Exemptions, and the £3,000 Annual Exemption — the gifts that never enter the tax system at all.
Inheritance Tax for Couples: Transferable Bands and the £1 Million Allowance — the spouse exemption, transferable bands, and why unmarried couples get none of it.
Inheritance Tax vs Capital Gains Tax: What Happens When Someone Dies — no Capital Gains Tax on death, the uplift to market value, and the 18%/24% rates on a later sale.

What this site will not do

This site is information only. It does not give personal tax advice, does not tell anyone what to do with their money, and does not recommend any product, pension or investment. Inheritance Tax depends on the facts of each estate, and the rules change — the thresholds and the pension change described here are already law, but the operational detail for pensions is still being finalised and full HMRC guidance is due in spring 2027. For anything complex, speak to a solicitor or tax adviser, and always check the current position on GOV.UK.

All figures on this site are for tax year 2026/27 (6 April 2026 – 5 April 2027) unless stated, and were checked against GOV.UK and HMRC on 12 November 2026. Inheritance Tax is UK-wide: the rates and thresholds are the same in England, Wales, Scotland and Northern Ireland, though the probate process differs by nation.

General information only. This page explains UK Inheritance Tax in plain English. It is not tax advice, and it cannot tell you what you owe or what you should do about your own tax or estate. Always confirm the current thresholds, rules, and your own position on GOV.UK or with HMRC before you act, and get professional advice for anything complicated. Contact: hello [at] tapetoolhq.com.