IHT Nil Rate Band 2026 UK: Current Thresholds, RNRB, and When They Will Change
The NRB is £325,000 and the RNRB is £175,000 — both frozen since 2009 and 2020 respectively, and both confirmed frozen to April 2030. A single person can shelter £500,000; a married couple up to £1,000,000. The RNRB starts to taper away above £2,000,000 and is fully lost at £2,350,000 (single) or £2,700,000 (couple).
| Band / Allowance | 2026/27 Amount | Who Gets It | Section | Notes |
|---|---|---|---|---|
| Standard Nil-Rate Band (NRB) | £325,000 | Every individual | s7 IHTA 1984 | Applies to any asset; always available |
| Residence Nil-Rate Band (RNRB) | £175,000 | Individual — home to direct descendants | s8D IHTA 1984 | Main home must pass to children/grandchildren; lost on estate >£2.35m |
| Single person total (NRB + RNRB) | £500,000 | Single person with home to children | ss7 + 8D IHTA 1984 | Full RNRB requires home to pass directly to direct descendants |
| Transferred NRB (s8A) | Up to £325,000 | Surviving spouse/civil partner | s8A IHTA 1984 (from FA2008) | Claim IHT402 with IHT400; unused % × NRB at second death |
| Transferred RNRB (s8G) | Up to £175,000 | Surviving spouse/civil partner | s8G IHTA 1984 | Claim IHT436 with IHT400; unused RNRB from first death |
| Married couple — both NRBs | £650,000 | Couple — second death | ss7 + 8A IHTA 1984 | First spouse leaves estate to survivor; claim IHT402 on second death |
| Married couple — both NRBs + both RNRBs | £1,000,000 | Couple — second death, home to children | ss7 + 8A + 8D + 8G IHTA 1984 | Requires home to pass to direct descendants; RNRB taper if estate >£2m |
| RNRB taper threshold | £2,000,000 | Estate value at which RNRB starts to reduce | s8E IHTA 1984 | RNRB reduces £1 per £2 above £2m; fully lost at £2.35m (single) or £2.7m (couple) |
2026/27. NRB and RNRB frozen to April 2030 (Autumn Budget 2024). Transferred NRB: s8A IHTA 1984 (introduced FA2008, applies to deaths from 9 October 2007); claim IHT402. Transferred RNRB: s8G IHTA 1984; claim IHT436. RNRB taper: s8E IHTA 1984 — £1 per £2 above £2m net estate (before reliefs). RNRB fully lost: £2.35m (single) / £2.7m (couple, both RNRBs).
IHT Nil Rate Band 2026: Complete Guide
The nil-rate band — £325,000 frozen since 2009
The inheritance tax nil-rate band (NRB — s7 IHTA 1984) is the threshold below which no IHT is charged. In 2026/27 it is £325,000 per person — the same amount as in April 2009. The NRB was last raised in April 2009 (from £312,000 in 2008/09) and has been frozen continuously since. In Autumn Budget 2024, the Chancellor confirmed the NRB will remain at £325,000 until at least April 2030 — a freeze of more than 20 years. Inflation impact: if the NRB had risen with CPI inflation since April 2009, it would be approximately £530,000–£560,000 by 2026. The freeze has therefore pulled an estimated additional 800,000+ UK families into the IHT net as property and asset values have risen. The NRB is set by statute (s7 IHTA 1984) and changed only by parliamentary legislation. Each individual has one NRB: there is no additional NRB for being unmarried, having children, or owning business property (those reliefs — RNRB, BPR, APR — operate separately and reduce the taxable estate value rather than adding to the NRB threshold).
The residence nil-rate band — £175,000 for the home to children
The Residence Nil-Rate Band (RNRB — s8D IHTA 1984) adds up to £175,000 to the standard NRB for individuals who own a qualifying residential property that passes to direct descendants on death. Key conditions: (1) The individual must have owned and occupied a residential property in the UK as their main residence at some point (it does not have to be the property they live in at death — a property they previously owned as a main home counts, subject to the downsizing addition rules at s8FA IHTA 1984); (2) The property (or part of it) must pass to 'direct descendants' — children (natural, adopted, or step), grandchildren, and their spouses/civil partners. Siblings, nieces, nephews, parents, and unmarried partners do not qualify; (3) The property must not be held in a discretionary trust (an IPDI trust for a direct descendant does qualify — the RNRB applies on the IPDI life tenant's death if the remainder passes to a direct descendant). Frozen at £175,000 to April 2030: the RNRB was introduced in 2017/18 at £100,000 and rose in £25,000 increments to reach £175,000 in 2020/21; it has been frozen since. Combined with the NRB, the RNRB gives a single person an effective IHT threshold of £500,000 — the most a single person can shelter without gifts or reliefs.
The RNRB taper — estates above £2 million lose the RNRB
The RNRB is tapered for estates above £2,000,000 (s8E IHTA 1984). For every £2 the estate exceeds £2m, the RNRB is reduced by £1. The taper is based on the net estate value (after deducting liabilities) before any reliefs (such as BPR or APR). For a single person: RNRB is fully eliminated when the estate reaches £2,350,000 (because the full £175,000 RNRB is lost at a rate of £1/£2 over £350,000 above £2m). For a married couple (with both RNRBs of £350,000): both RNRBs are fully eliminated at £2,700,000 (£350,000 taper at £1/£2 = £700,000 above £2m). Planning implication: for estates near the £2m taper threshold, reducing the estate below £2m can be very valuable — each £2 reduction in the estate below £2m restores £1 of RNRB (worth 40p of IHT saved). A £2,200,000 estate (single) loses £100,000 of RNRB (40% IHT on £100k = £40,000 extra IHT vs a £2m estate). Strategies: lifetime gifts, AIM BPR shares, pensions (pre-April 2027), charitable legacies can all reduce the estate and help restore the RNRB below the taper threshold.
Transferable NRB and RNRB — how couples double the threshold
Married couples and civil partners have access to two additional allowances that can double (or more) the effective IHT threshold: (1) Transferred NRB (s8A IHTA 1984, introduced FA 2008): where the first to die did not use all of their NRB (e.g. by leaving the full estate to the surviving spouse under the spousal exemption — s18 IHTA), the unused NRB percentage transfers to the survivor. On the second death, the survivor has their own NRB plus the transferred NRB. 100% unused = 100% transferred = £325,000 additional NRB. Total = £650,000. Multiple predeceased spouses: the transferred NRB is capped at 100% additional (no matter how many prior spouses all left 100% unused NRB); (2) Transferred RNRB (s8G IHTA 1984): where the first to die did not use their RNRB (e.g. they had no home, or the home passed to the spouse), the unused RNRB percentage transfers to the survivor. On the second death: own RNRB £175,000 + transferred RNRB £175,000 = £350,000 total RNRB. Grand total threshold (NRBs + RNRBs): £650,000 + £350,000 = £1,000,000. Neither transfer is automatic: (a) claim IHT402 (transferred NRB) with the IHT400 on the second death — with evidence from the first death (death certificate, marriage certificate, first estate details); (b) claim IHT436 (transferred RNRB) with the IHT400 on the second death. Evidence of non-use of RNRB on first death: if first spouse had no home, or the home passed to the survivor (so no RNRB was used), the unused percentage is 100%.
When will the nil-rate band increase? NRB history and prospects
NRB history: 1986 (£71,000) → 1996 (£200,000) → 2009 (£325,000) → frozen. Under current government policy (confirmed Autumn Budget 2024), the NRB stays at £325,000 until April 2030. The RNRB stays at £175,000 until April 2030. After April 2030: no commitment. The NRB could be increased, indexed to inflation, or frozen further depending on the government of the day. Real-terms erosion: £325,000 in April 2009 was equivalent in purchasing power to approximately £530,000-£560,000 by 2026 (CPI estimate). The 17-year freeze has drawn hundreds of thousands of additional estates into the IHT net. Planning in the context of frozen NRB: because the NRB is fixed while property values rise, the RNRB becomes more important (not just a nice-to-have — it is essential to avoid IHT on a medium-value property estate); lifetime gifts (PETs starting the 7-year clock now) are increasingly time-critical; AIM BPR investments, pension planning, and charitable legacies are all more valuable in a frozen-NRB environment. If the estate is above £2m: the RNRB is tapered away too, meaning the effective IHT threshold may be just the NRB (£325,000 for a single person).
Frequently Asked Questions
What is the inheritance tax nil rate band in 2026?
The IHT nil-rate band (NRB) in 2026/27 is £325,000 per person — frozen since April 2009 and confirmed frozen to April 2030 (Autumn Budget 2024). The Residence Nil-Rate Band (RNRB) is £175,000 per person (also frozen to 2030), available where the main home passes to direct descendants (children, grandchildren). Single person with RNRB: total threshold £500,000. Married couple using both NRBs + both RNRBs: total threshold £1,000,000.
What is the IHT threshold for a married couple in 2026?
A married couple can achieve a combined IHT threshold of up to £1,000,000 in 2026/27. This uses: own NRB £325,000 + transferred NRB (s8A IHTA 1984) from first death £325,000 = £650,000; plus own RNRB £175,000 + transferred RNRB (s8G IHTA 1984) from first death £175,000 = £350,000. Total: £1,000,000. Conditions: (1) First spouse left estate to the surviving spouse (s18 IHTA spousal exemption) so both NRBs are available; (2) The main home passes to direct descendants (children/grandchildren) on the second death; (3) IHT402 (transferred NRB) and IHT436 (transferred RNRB) are claimed on the IHT400 on second death. The £1,000,000 threshold is subject to the RNRB taper above £2m.
When will the nil-rate band increase?
The NRB will remain at £325,000 until at least April 2030 (confirmed Autumn Budget 2024). The RNRB is also frozen at £175,000 to April 2030. After April 2030, no commitment has been made — it depends on the government in power at that time. The NRB has been at £325,000 since April 2009 (17 years by 2026). In real terms (CPI inflation), £325,000 in 2009 is equivalent to approximately £530,000–£560,000 by 2026. The freeze has significantly increased the number of estates caught by IHT.
What is the RNRB taper and when is the RNRB lost?
The RNRB taper (s8E IHTA 1984): for every £2 the estate exceeds £2,000,000, the RNRB is reduced by £1. The net estate value (after liabilities, before reliefs) is used for the taper. Single person: RNRB fully lost at £2,350,000 (£175,000 RNRB × 2 = £350,000 taper above £2m). Married couple (both RNRBs — £350,000 combined): fully lost at £2,700,000 (£350,000 × 2 = £700,000 above £2m). Planning: reducing the estate below £2m (via lifetime gifts, AIM BPR, charitable legacies, pensions pre-April 2027) can restore the RNRB — each £2 reduction below £2m restores £1 RNRB (worth £0.40 in IHT saved).
Does the nil-rate band reset on death — can you inherit a spouse's NRB?
Yes — the transferable NRB (s8A IHTA 1984) allows the unused NRB from the first spouse's death to transfer to the survivor. On the second death, the survivor has their own NRB (£325,000) plus the transferred NRB (up to £325,000 = total £650,000). The transfer is based on the unused percentage of the NRB at the first death, applied to the NRB in force at the second death. This is NOT automatic: it must be claimed on form IHT402 with the IHT400 on the second death, with supporting evidence (first death certificate, marriage certificate, details of the first estate). Multiple predeceased spouses: the transferred NRB is capped at 100% additional — you cannot accumulate more than 200% NRB (£650,000 total).
Make Sure Your Will Claims Both NRBs and Both RNRBs
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