Inheritance Tax on a £600,000 Estate UK: How Much Will You Pay? (2026 Worked Examples)
A single person with a £600,000 estate pays between £0 and £110,000 in inheritance tax — depending on whether the home passes to children (RNRB applies) and whether prior gifts reduce the NRB. A married couple with the same estate size pays £0, using the combined NRB of £650,000.
| Scenario | NRB | RNRB | Threshold | Taxable | IHT Due |
|---|---|---|---|---|---|
| Single person — home passes to children (RNRB applies) | £325,000 | £175,000 | £500,000 | £100,000 | £40,000 |
| Single person — no home / home not to direct descendants | £325,000 | None | £325,000 | £275,000 | £110,000 |
| Single person — home to children + 10% charity legacy | £325,000 | £175,000 | £500,000 | £100,000 | £36,000 |
| Married couple — first leaves everything to spouse; second death | £650,000 (both NRBs) | None required | £650,000 | £0 | £0 |
| Married couple — both NRBs + both RNRBs (home to children) | £650,000 | £350,000 (both) | £1,000,000 | £0 | £0 |
| Single — failed PET £100k within 7yr (uses NRB first) | £225,000 (residual NRB) | £175,000 | £400,000 | £200,000 | £80,000 |
| Single — £200k AIM BPR shares (2yr+) within estate | £325,000 | £175,000 | £500,000 + £200k BPR | £0 (total) | £0 |
2026/27. NRB: £325,000 (frozen to 2030). RNRB: £175,000 (frozen to 2030). RNRB requires main home to pass to direct descendants. Transferred NRB (s8A IHTA): claim form IHT402. RNRB taper: £1 per £2 above £2m; fully lost at £2.35m (single) / £2.7m (couple). 36% reduced IHT rate where 10%+ of net estate passes to charity (s36 IHTA).
£600,000 Estate IHT: Detailed Analysis
Single person with a £600,000 estate — the key variable is the RNRB
For a single person (unmarried, widowed, or divorced) with a £600,000 estate, the inheritance tax depends primarily on whether the Residence Nil-Rate Band (RNRB) applies. The RNRB (s8D IHTA 1984) adds up to £175,000 to the standard NRB (£325,000) — but only where the main home passes to direct descendants (children, stepchildren, adopted children, grandchildren). If the RNRB applies: threshold = £325,000 + £175,000 = £500,000. Taxable estate = £600,000 − £500,000 = £100,000. IHT at 40% = £40,000. If the RNRB does not apply (no home, home in discretionary trust, no children, or home left to other beneficiaries): threshold = £325,000 only. Taxable estate = £600,000 − £325,000 = £275,000. IHT at 40% = £110,000. The difference is £70,000 in IHT — the maximum value of the RNRB for a single person in 2026/27. To ensure the RNRB applies: the will must direct the home (or the proportion of it) to direct descendants. If the home is held jointly as joint tenants with a partner, the survivor takes the whole property by survivorship — the deceased's share does not pass under the will and cannot claim the RNRB.
Married couple with a £600,000 estate — potentially £0 IHT
For a married couple (or civil partners) with a combined estate of £600,000, the inheritance tax position is very different from a single person. Assuming the first to die leaves everything to the surviving spouse: (1) First death: £0 IHT — the spousal exemption (s18 IHTA 1984) exempts all transfers between spouses regardless of size; (2) Second death: the surviving spouse has their own NRB (£325,000) plus the transferred NRB from the first death (s8A IHTA 1984 — 100% unused = £325,000) = total NRB of £650,000. The estate on the second death is £600,000 — which is below the £650,000 NRB. IHT = £0, even without claiming the RNRB. If the home passes to children on the second death: add both RNRBs (own £175,000 + transferred £175,000 = £350,000). Total threshold = £1,000,000. Estate £600,000 well below threshold. IHT = £0. Conclusion: a married couple with a £600,000 estate who structure their wills correctly should pay £0 IHT — regardless of whether the home passes to children — simply by using both NRBs via the transferable NRB.
Reducing IHT on a £600,000 estate — strategies for single people
For a single person facing a potential £40,000–£110,000 IHT bill on a £600,000 estate, the most effective strategies are: (1) Ensure the will leaves the home to children: claims the RNRB (£175,000 extra threshold) = IHT reduced from £110,000 to £40,000 on a £600,000 estate. This is free to implement through the will; (2) Leave 10%+ to charity: if 10% of the net estate goes to a qualifying charity (s23 IHTA 1984), the IHT rate on the remainder reduces from 40% to 36% (s36 IHTA). On a £600,000 estate with RNRB: taxable £100,000. Charity: £6,000 (1% of gross estate is sufficient if structured correctly). IHT at 36% on remaining taxable estate: £34,560 — vs £40,000 without charity; (3) Lifetime gifts: annual exemption (£3,000/yr — £3,000/yr removes £3,000 from the estate at 40% = £1,200 per year IHT saved). PETs to individuals (IHT-free after 7 years — start the clock now); (4) AIM BPR portfolio: investing £100,000 in qualifying AIM BPR shares removes £100,000 from the taxable estate after 2 years, saving £40,000 in IHT. Carries investment risk; (5) Whole-of-life insurance in trust: the life insurance payout funds the IHT bill — the estate pays £40,000 IHT from the insurance proceeds rather than selling assets.
Failed PETs — when a £600,000 estate becomes much more expensive
If gifts were made in the 7 years before death (PETs — s3A IHTA 1984), the failed PETs are added to the estate and use up the NRB. Example: a single person with a £600,000 estate gave £200,000 to their children 3 years before death. The failed PET of £200,000 uses up £200,000 of the NRB (£325,000 − £200,000 = £125,000 residual NRB). At death: Estate £600,000. Residual NRB: £125,000. RNRB (home to children): £175,000. Total threshold: £300,000. Taxable estate: £300,000. IHT at 40% = £120,000. Taper relief: if death occurs in years 3-7, taper relief reduces the IHT on the PET (the £200,000 that was gifted) — not on the estate. Taper in year 3-4: 20% reduction on the IHT attributable to the PET above the NRB. But since the PET was within the NRB on the gift date (£200,000 < £325,000), there may be no taper relief on the PET itself — only the estate IHT at 40% on £300,000 applies. This illustrates why keeping records of all gifts made in the last 7 years (IHT403 form) is essential for the executors to correctly calculate the estate IHT.
Frequently Asked Questions
How much inheritance tax do you pay on a £600,000 estate?
It depends on the situation: (1) Single person, home passes to children (RNRB applies): NRB £325,000 + RNRB £175,000 = £500,000 threshold. Taxable = £100,000. IHT = £40,000 at 40%. (2) Single person, no RNRB (no home or home not to children): NRB £325,000 only. Taxable = £275,000. IHT = £110,000. (3) Married couple, first leaves everything to spouse: second death has NRB £650,000 (both NRBs combined). Estate £600,000 below threshold. IHT = £0. (4) Married couple with home to children: combined threshold up to £1,000,000. IHT = £0.
Does a married couple pay inheritance tax on a £600,000 estate?
No — a married couple with a £600,000 estate who leave everything to each other on the first death pay £0 IHT. The surviving spouse has NRB £325,000 plus transferred NRB £325,000 (s8A IHTA 1984) = £650,000 combined NRB. The estate of £600,000 is below £650,000 — no IHT. If the home also passes to children on the second death: add transferred RNRB (£350,000 combined) for a total threshold of £1,000,000 — well above the £600,000 estate. The key requirement: the NRB transfer must be claimed on form IHT402 with the IHT400 on the second death.
What is the inheritance tax threshold for a single person in 2026?
2026/27: NRB £325,000 (frozen since 2009, frozen to 2030). If the main home passes to direct descendants (children, grandchildren): add RNRB £175,000 = total threshold £500,000. On a £600,000 estate: taxable = £100,000, IHT = £40,000 (with RNRB). Without RNRB: taxable = £275,000, IHT = £110,000. To claim the full £500,000 threshold: the will must direct the home to direct descendants (not to a discretionary trust or non-descendants).
How can I reduce the inheritance tax on a £600,000 estate?
Key strategies for reducing IHT on a £600,000 estate: (1) Leave the home to children in the will — claims the RNRB (saves £70,000 IHT vs no RNRB); (2) Leave 10%+ to charity — reduces IHT rate from 40% to 36% (saves ~£4,000 on a £100,000 taxable estate); (3) Make annual gifts (£3,000/yr — each year's gift removes assets from the estate); (4) Invest in AIM BPR qualifying shares (100% IHT-exempt after 2 years, up to £1m cap); (5) Pension contributions before April 2027 (pension currently outside the estate); (6) Normal expenditure from income (s21 IHTA — uncapped, immediately IHT-free).
What is the RNRB and how does it reduce IHT on a £600,000 estate?
The Residence Nil-Rate Band (RNRB — s8D IHTA 1984) is an additional IHT-free allowance of up to £175,000 per person (2026/27), available when the main home passes to direct descendants (children, stepchildren, grandchildren). On a £600,000 estate for a single person: without RNRB, threshold is £325,000 and IHT = £110,000. With RNRB (home to children): threshold rises to £500,000 and IHT = £40,000 — saving £70,000. The RNRB is activated by the will: it must specifically direct the home (or the proportion of it remaining in the estate) to direct descendants.
Turn a £40,000 IHT Bill Into £0 — Update Your Will
For a £600,000 estate, the difference between a correctly drafted will and the wrong one can be £70,000 in IHT (RNRB). Directing the home to children and including a 10% charitable legacy saves a further £4,000+. WillSafe will kits from £39.99 for England and Wales.
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