Estate IHT Calculator14 June 2026 · 9 min read

Inheritance Tax on £800,000 Estate UK: How Much IHT Will I Pay? (2026)

Q: How much inheritance tax will I pay on an £800,000 estate?

Depends on your allowances: single person with RNRB (home to children) = £120,000 IHT (40% on £300,000 above the £500,000 threshold). Single person without RNRB = £190,000 IHT (40% on £475,000 above the £325,000 NRB). Married couple with both transferred NRBs and RNRBs = £0 IHT (£800,000 is below the £1 million combined threshold). Married couple with NRBs only (no RNRB) = £60,000 IHT (40% on £150,000). The RNRB requires the home to pass to a direct descendant — if left to a discretionary trust, the RNRB is lost and IHT increases by £70,000.

Q: Can I reduce IHT on an £800,000 estate to zero?

It is possible for some estates. Married couple using both transferred NRBs and RNRBs: £0 IHT (estate below £1m threshold). Single person: IHT can be eliminated if £300,000 is invested in AIM BPR qualifying shares for 2+ years (100% IHT-exempt after 2yr) OR if enough is given away as PETs surviving 7 years. A £30,000 charitable legacy reduces IHT from £120,000 to £97,200 (saving £22,800) under the 36% rate (s36 IHTA 1984). Full elimination via a single strategy is harder for a single person without BPR or a PET surviving 7 years — typically requires a combination of strategies.

Q: Does the RNRB apply to an £800,000 estate?

Yes — a single person with an £800,000 estate is well below the RNRB taper threshold (£2 million), so the full RNRB of £175,000 is available — subject to the qualifying conditions: (1) a qualifying residential interest (the home) in the estate; and (2) the home passes to a direct descendant (child, grandchild, stepchild, etc.). If the home is left to a discretionary trust, or if there is no qualifying home in the estate, the RNRB is lost. The RNRB is limited to the lower of £175,000 and the net value of the qualifying residential interest — if the home is worth £100,000, the RNRB is £100,000 (not £175,000).

Q: What happens if I made gifts before death and my estate is £800,000?

Gifts made within 7 years of death to individuals are PETs (s3A IHTA 1984). If the donor dies within 7 years, the PET becomes chargeable and uses up the NRB first. Example: £100,000 gift 4 years before death. NRB residue for the death estate = £225,000 (£325k − £100k). With RNRB: threshold = £400,000. IHT on £800,000 estate = 40% × £400,000 = £160,000. Plus IHT on the £100,000 PET with 40% taper (4yr): 40% × 40% × £100k = £16,000. Total = £176,000. Gifts made more than 7 years before death are fully exempt.

Q: How does the 10% charitable legacy reduce IHT on an £800,000 estate with RNRB?

Under s36 IHTA 1984: the taxable estate above the NRBs (the 'baseline amount') is £300,000 (£800k minus £500k threshold). 10% of £300,000 = £30,000 to charity is needed to trigger the 36% rate. IHT at 36% on the remaining £270,000 = £97,200. Compare to 40% without charity: IHT = £120,000. Saving = £22,800. The £30,000 charitable donation costs the estate only £7,200 net (£30,000 − £22,800 IHT saving) — HMRC effectively contributes £22,800 toward the £30,000 charity gift. The charitable legacy should be drafted in the will as 'the minimum amount required to qualify for the reduced IHT rate under s36 IHTA 1984.'

IHT on a £800,000 estate ranges from £0 (married couple with full transferred NRBs and RNRBs) to £190,000 (single person, no RNRB). A single person with the RNRB faces £120,000 IHT — reduced to £97,200 with a 10% charitable legacy, or eliminated entirely with AIM BPR investing.

Scenario	Threshold	Taxable	IHT	Notes
Single person — RNRB applies (home to children)	£500,000 (NRB £325k + RNRB £175k)	£300,000	£120,000	Most common scenario for homeowners leaving to children
Single person — no RNRB (home to trust or no qualifying home)	£325,000 (NRB only)	£475,000	£190,000	RNRB lost where home left to discretionary trust or no qualifying home in estate
Married couple — transferred NRBs + transferred RNRBs (survivor)	£1,000,000 (NRB £325k + tNRB £325k + RNRB £175k + tRNRB £175k)	£0 (estate below £1m threshold)	£0	Standard married couple: survivor's estate up to £1m entirely IHT-free; £800k well below threshold
Married couple — transferred NRBs only (no RNRB; home not qualifying)	£650,000 (NRB £325k + tNRB £325k)	£150,000	£60,000	No RNRB — home in discretionary trust, or home sold and proceeds in estate
Single person + RNRB + 10% charitable legacy (36% rate)	£500,000 (NRB + RNRB)	£300,000 (before charity deduction)	£97,200 (36% on £270,000 after £30,000 charity gift)	s36 IHTA 1984: 10% of baseline £300k = £30k to charity; 36% rate applies; saving £22,800 vs 40%
Single person + RNRB + AIM BPR £300,000 (2yr+ held)	£500,000 (NRB + RNRB)	£0 (£300k AIM BPR exempt; remaining estate at or below threshold)	£0	£800k estate: £500k at threshold; £300k in AIM BPR qualifying shares = 100% exempt; IHT eliminated
Single person + RNRB + failed PET £100,000 (4 years ago)	£225,000 NRB residue + £175,000 RNRB = £400,000	£400,000	£160,000	Failed PET uses £100k of NRB (£325k − £100k = £225k); taper at 4yr = 40% rate on PET itself (no taper saving on PET <4yr); estate IHT on £400k at 40% = £160k

IHT rate: 40% (s7 IHTA 1984). NRB: £325,000 (frozen since 2009; frozen to 2030 — Autumn Statement 2022). RNRB: £175,000 (frozen to 2030). RNRB conditions: s8D IHTA 1984 — qualifying residential interest (home) + direct descendant (s8K IHTA 1984). RNRB lost if home in discretionary trust. Transferred NRB: s8A IHTA 1984 — IHT402. Transferred RNRB: s8G IHTA 1984 — IHT436. Spousal exemption: s18 IHTA 1984. 36% rate: s36 IHTA 1984 (Finance Act 2012) — 10% of baseline to charity. AIM BPR: s105(1)(bb) IHTA 1984 — 100% IHT-exempt after 2yr; £1m combined BPR/APR cap from April 2026. Failed PETs: s3A IHTA 1984 — 7yr rule; taper relief s7(4) IHTA (3-7yr). RNRB taper: s8E IHTA — £1 per £2 above £2m net estate. IHT6-month deadline: s226 IHTA 1984.

IHT on £800,000 Estate: Complete Guide

Single person with £800,000 estate and the RNRB

For a single person owning an £800,000 estate in 2026/27, the starting IHT calculation depends critically on whether the Residence Nil-Rate Band (RNRB — s8D IHTA 1984) applies. RNRB applies where: (1) a qualifying residential interest (the home) is in the estate; and (2) the home passes to a direct descendant (lineal descendant — child, grandchild, stepchild, fostered child, etc.). If both conditions are met: NRB £325,000 + RNRB £175,000 = £500,000 threshold. Taxable estate: £800,000 − £500,000 = £300,000. IHT: 40% × £300,000 = £120,000. If RNRB does not apply (home left to sibling, friend, non-lineal relative, or held in a discretionary trust): threshold = NRB £325,000 only. Taxable estate: £800,000 − £325,000 = £475,000. IHT: 40% × £475,000 = £190,000. The difference between having RNRB and not: £70,000 (40% × £175,000 RNRB). This £70,000 gap explains why many people are advised to leave the home directly to children (or through a qualifying trust such as an IPDI or bare trust) rather than a discretionary trust — the RNRB is preserved and the IHT bill reduces by £70,000.

Married or civil partnered couple with £800,000 estate

Where one spouse has already died and transferred their unused NRB and RNRB to the survivor, the surviving spouse can have a combined threshold of up to £1 million: NRB £325,000 + transferred NRB (s8A IHTA 1984) £325,000 + RNRB £175,000 + transferred RNRB (s8G IHTA 1984) £175,000 = £1,000,000. An £800,000 estate is well below the £1 million combined threshold — IHT = £0. The transferred NRB is claimed on form IHT402; the transferred RNRB on form IHT436 (as part of IHT400 on second death). For the transferred NRB to be available, the first spouse's NRB must have been unused or only partially used — if the first spouse left everything to the survivor (s18 IHTA spousal exemption), 100% of the NRB transfers. If the first spouse had no qualifying home (or no home passes to direct descendants on first death), the transferred RNRB is based on the unused RNRB as a percentage, not a fixed £175,000 — but in most cases a 100% unused RNRB transfers. Key point: where RNRB is not available (e.g. home in discretionary trust, or no qualifying home): combined NRBs only = £650,000. £800,000 − £650,000 = £150,000 taxable. IHT = £60,000.

Reducing IHT on £800,000 — the most effective strategies

Several planning strategies can reduce the £120,000 IHT bill (with RNRB) on an £800,000 estate: (1) Charitable legacy at 10% — leave £30,000 (10% of taxable estate £300,000) to charity; rate drops to 36%; IHT = £97,200; saving = £22,800; effective cost of charity donation = £7,200 (HMRC subsidises £22,800 of the £30,000 gift); (2) AIM BPR investing — invest £300,000 in qualifying AIM shares (s105(1)(bb) IHTA 1984); after 2 years the shares are 100% IHT-exempt; with RNRB: taxable estate = £800k − £300k AIM (exempt) − £500k threshold = £0; IHT eliminated entirely; risk: AIM shares are volatile; (3) Lifetime gifts as PETs — gift £300,000 to children now; 7-year clock starts; if survived 7 years, IHT on the remaining £500,000 estate = £0 (within RNRB + NRB threshold); (4) Normal expenditure from income (s21 IHTA) — if income exceeds normal expenditure, regular gifts out of income are immediately IHT-exempt regardless of amount; (5) Annual exemption — £3,000/yr immediately exempt; prior year unused exemption can be used in the following year only (max £6,000 in year 2 if no exemption used in year 1); (6) Deed of variation — after death, beneficiaries can redirect assets to charity within 2 years (s142 IHTA) to meet the 10% reduced rate threshold.

RNRB taper — does it apply to an £800,000 estate?

The RNRB taper (s8E IHTA 1984) reduces the RNRB by £1 for every £2 the net estate exceeds £2 million. For a single person with an £800,000 estate: the estate is well below £2 million — the taper does not apply and the full RNRB (£175,000) is available. The taper only matters for very large estates (above £2 million for single, or £2.35 million for single person with no transferred RNRB, or £2.7 million for a couple using both transferred allowances). For the vast majority of people with an £800,000 estate, the RNRB is available in full — subject to the qualifying conditions (home in estate; passes to direct descendants). Note: the RNRB is based on the net estate value at death (including all assets, not just the home). An £800,000 estate could have a £100,000 home and £700,000 in other assets — RNRB is still available at up to £100,000 (limited to the lower of £175,000 and the net home value). In this scenario: threshold = £325,000 NRB + £100,000 RNRB (limited) = £425,000; taxable = £375,000; IHT = £150,000.

Failed PETs, lifetime gifts, and taper relief on an £800,000 estate

If the deceased made gifts to individuals (PETs — s3A IHTA 1984) in the 7 years before death, these are 'failed PETs' and are added back to the estate for IHT purposes. The failed PET uses up the NRB first (before the NRB applies to the death estate). Example: £100,000 gift made 4 years before death. The NRB available to the death estate is reduced: £325,000 − £100,000 = £225,000 NRB residue. With RNRB: threshold = £225,000 + £175,000 = £400,000. Taxable estate: £800,000 − £400,000 = £400,000. IHT on death estate: 40% × £400,000 = £160,000. IHT on the failed PET itself: £100,000 is chargeable. Taper relief (s7(4) IHTA 1984) reduces the IHT rate on the PET based on years survived: 4 years = 40% of the full IHT rate = 16% on £100,000 = £16,000. Total IHT = £160,000 (estate) + £16,000 (PET) = £176,000. Compare to no PET: IHT = £120,000 (with RNRB). The failed PET increases total IHT by £56,000 in this example. Gifts made more than 7 years before death: fully exempt — no impact on NRB or IHT.

Frequently Asked Questions

How much inheritance tax will I pay on an £800,000 estate?

Depends on your allowances: single person with RNRB (home to children) = £120,000 IHT (40% on £300,000 above the £500,000 threshold). Single person without RNRB = £190,000 IHT (40% on £475,000 above the £325,000 NRB). Married couple with both transferred NRBs and RNRBs = £0 IHT (£800,000 is below the £1 million combined threshold). Married couple with NRBs only (no RNRB) = £60,000 IHT (40% on £150,000). The RNRB requires the home to pass to a direct descendant — if left to a discretionary trust, the RNRB is lost and IHT increases by £70,000.

Can I reduce IHT on an £800,000 estate to zero?

It is possible for some estates. Married couple using both transferred NRBs and RNRBs: £0 IHT (estate below £1m threshold). Single person: IHT can be eliminated if £300,000 is invested in AIM BPR qualifying shares for 2+ years (100% IHT-exempt after 2yr) OR if enough is given away as PETs surviving 7 years. A £30,000 charitable legacy reduces IHT from £120,000 to £97,200 (saving £22,800) under the 36% rate (s36 IHTA 1984). Full elimination via a single strategy is harder for a single person without BPR or a PET surviving 7 years — typically requires a combination of strategies.

Does the RNRB apply to an £800,000 estate?

Yes — a single person with an £800,000 estate is well below the RNRB taper threshold (£2 million), so the full RNRB of £175,000 is available — subject to the qualifying conditions: (1) a qualifying residential interest (the home) in the estate; and (2) the home passes to a direct descendant (child, grandchild, stepchild, etc.). If the home is left to a discretionary trust, or if there is no qualifying home in the estate, the RNRB is lost. The RNRB is limited to the lower of £175,000 and the net value of the qualifying residential interest — if the home is worth £100,000, the RNRB is £100,000 (not £175,000).

What happens if I made gifts before death and my estate is £800,000?

Gifts made within 7 years of death to individuals are PETs (s3A IHTA 1984). If the donor dies within 7 years, the PET becomes chargeable and uses up the NRB first. Example: £100,000 gift 4 years before death. NRB residue for the death estate = £225,000 (£325k − £100k). With RNRB: threshold = £400,000. IHT on £800,000 estate = 40% × £400,000 = £160,000. Plus IHT on the £100,000 PET with 40% taper (4yr): 40% × 40% × £100k = £16,000. Total = £176,000. Gifts made more than 7 years before death are fully exempt.

How does the 10% charitable legacy reduce IHT on an £800,000 estate with RNRB?

Under s36 IHTA 1984: the taxable estate above the NRBs (the 'baseline amount') is £300,000 (£800k minus £500k threshold). 10% of £300,000 = £30,000 to charity is needed to trigger the 36% rate. IHT at 36% on the remaining £270,000 = £97,200. Compare to 40% without charity: IHT = £120,000. Saving = £22,800. The £30,000 charitable donation costs the estate only £7,200 net (£30,000 − £22,800 IHT saving) — HMRC effectively contributes £22,800 toward the £30,000 charity gift. The charitable legacy should be drafted in the will as 'the minimum amount required to qualify for the reduced IHT rate under s36 IHTA 1984.'

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