Nil Rate Band UK (2026): The £325,000 IHT Threshold, RNRB & How to Double Your Allowance
Quick answer
The nil rate band (NRB) is the inheritance tax-free threshold — £325,000 per person in 2026/27, frozen until at least April 2030. Add the Residence Nil Rate Band (RNRB) of up to £175,000 and an individual can pass £500,000 tax-free. Married couples and civil partners can combine and transfer both allowances to pass up to £1 million free of IHT. Everything above the threshold is taxed at 40%.
What is the nil rate band?
The nil rate band (NRB) is the portion of your estate that is charged inheritance tax at a rate of nil — zero per cent. It is not technically an exemption; it is a tax band with a 0% rate. Everything above it is charged at 40% (or 36% if you leave at least 10% of your net estate to charity).
The NRB has been set at £325,000 since 6 April 2009. Despite house prices rising by roughly 80% since then, the threshold has not moved. It is frozen until at least April 2030 under the Autumn 2024 Budget.
The Residence Nil Rate Band (RNRB)
The Residence Nil Rate Band was introduced in 2017 to address growing concern that average family homes were pushing ordinary estates into IHT territory. It adds an extra allowance of up to £175,000(2026/27) — but only if:
- You own a home (or have downsized after 8 July 2015), and
- You leave that home to a direct descendant — children, grandchildren, step-children, or adopted children.
The RNRB tapers away for large estates: it reduces by £1 for every £2 by which the net estate exceeds £2 million. An estate worth £2.35m therefore has no RNRB at all (£350,000 excess ÷ 2 = £175,000 taper).
How much can you pass tax-free in 2026?
| Scenario | NRB | RNRB | Tax-free total |
|---|---|---|---|
| Single person (no home / no direct descendants) | £325,000 | — | £325,000 |
| Single person with qualifying home left to children | £325,000 | £175,000 | £500,000 |
| Surviving spouse (NRB and RNRB transferred from first death) | £650,000 | £350,000 | £1,000,000 |
| Surviving spouse — estate above £2.35m | £650,000 | £0 (tapered) | £650,000 |
The transferable nil rate band — how it works
When a spouse or civil partner dies, any unused portion of their NRB can be transferred to the surviving partner and added to the survivor's own NRB. If the first spouse leaves everything to the survivor (which is IHT-exempt), their entire NRB of £325,000 is unused — so the survivor has a total NRB of £650,000 available on their death.
This transfer is not automatic in the will. Executors must claim it on the second death by completing HMRC form IHT402 and submitting it with the estate's IHT return. The claim can be made even if the first death was decades ago, as long as supporting evidence exists (typically the first death certificate and evidence of what the first estate contained).
The transferable RNRB
Like the standard NRB, unused RNRB can be transferred to a surviving spouse or civil partner — even if the first spouse did not own a home at the time of their death. HMRC form IHT435 is used to claim the RNRB on the second death. Many executors miss this claim, leaving the estate with an unnecessary tax bill.
Using the nil rate band with lifetime gifts
Gifts made within 7 years of death that are not exempt (e.g. not annual £3,000 allowance, not gifts between spouses) are called potentially exempt transfers (PETs). On death, PETs made within 7 years are brought back into the estate and use up the nil rate band first — before the remaining estate does.
Example: you gift £200,000 to your children 3 years before you die. Your NRB on death is reduced by £200,000 to only £125,000. This can dramatically increase the IHT bill if not planned carefully.
Gifts made more than 7 years before death fall completely outside the estate. This is the basis of the “7-year rule” for lifetime IHT planning.
How to make the most of the nil rate band
- Leave everything to your spouse first — preserves both NRBs for the second death.
- Make sure your will leaves your home to direct descendants — required to claim RNRB.
- Use the annual gift allowance — £3,000 per year per person falls outside the estate immediately.
- Consider a life insurance policy written in trust — pay the IHT bill from outside the estate.
- Review your will if your estate has grown — old wills may not be structured to optimise both allowances.
Freeze warning
The nil rate band is frozen at £325,000 until April 2030. UK house prices have risen roughly 80% since 2009 when the band was last set. HMRC collected a record £8.2 billion in inheritance tax in 2024/25. As estates grow in value, more families will exceed the threshold without realising it. A will review every 5 years — and after any major asset change — is essential.
Frequently asked questions
What is the nil rate band for inheritance tax in the UK?▼
The nil rate band (NRB) is the amount you can leave on death before inheritance tax is charged. It is currently £325,000 and has been frozen at this level since April 2009. It will remain at £325,000 until at least April 2030. Everything above the available nil rate band is taxed at 40% (or 36% if 10% or more of the net estate is left to charity).
Can spouses transfer the nil rate band to each other?▼
Yes. Unused nil rate band can be transferred to a surviving spouse or civil partner on the first death. If the first spouse's full NRB was unused (for example, because they left everything to the surviving spouse), the survivor has 200% of the NRB — up to £650,000. The transfer applies automatically; you do not need to claim it in the will itself, but executors must apply to HMRC on the second death.
What is the Residence Nil Rate Band and who qualifies?▼
The Residence Nil Rate Band (RNRB) is an additional allowance of up to £175,000 per person (2026/27) that applies when you leave a qualifying home to a direct descendant — children, grandchildren, step-children, or adopted children. Combined with the standard NRB, an individual can pass up to £500,000 free of IHT. A married couple where the RNRB is transferred on the first death can pass up to £1m tax-free. The RNRB tapers away for estates over £2m (£1 reduction per £2 of excess).
What is the total IHT-free allowance for a married couple in 2026?▼
A married couple or civil partners can pass up to £1m free of inheritance tax in 2026/27 — combining two standard NRBs (2 × £325,000 = £650,000) and two Residence Nil Rate Bands (2 × £175,000 = £350,000), totalling £1m. Both NRB and RNRB must be transferred from the first death to the survivor's estate on the second death. The home must be left to a direct descendant to claim the RNRB.
Does the nil rate band apply if I leave everything to my spouse?▼
Assets left to a UK-domiciled spouse or civil partner are 100% exempt from IHT regardless of value — they do not use up the nil rate band. Because the NRB is unused, it transfers to the survivor in full. On the second death, the survivor has both their own NRB and the transferred NRB. This is why leaving everything to a spouse first (then to children on the second death) is a common and effective estate planning approach.
What happens to the nil rate band if I make gifts before I die?▼
Gifts made within 7 years of death that are not exempt (e.g. not annual allowance gifts, not gifts to a spouse) are brought back into the estate as 'potentially exempt transfers' and use up the nil rate band first. For example, if you made a £100,000 gift 3 years before death, your available NRB on death is reduced to £225,000 (£325,000 − £100,000). Gifts made more than 7 years before death fall outside the estate entirely.
Is the nil rate band frozen and will it increase?▼
The nil rate band has been frozen at £325,000 since April 2009 — 17 years without an increase. It was scheduled to remain frozen until April 2028 under the 2021 Budget, and the Autumn 2024 Budget extended the freeze to April 2030. With UK house prices significantly higher than in 2009, many more estates now fall above the threshold than when it was set. The Government uses frozen thresholds as a form of stealth tax: as asset values rise, more estates become liable for IHT.
Make sure your estate uses every allowance
A well-drafted will is the foundation of IHT planning — making sure the right assets go to the right people at the right time. WillSafe UK provides solicitor-quality will kits from £29.99.
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This article is for general information only and does not constitute legal or financial advice. Tax rules and thresholds are correct for England & Wales as at May 2026. Always consult a qualified adviser for your specific circumstances.