Inheritance Tax in England 2026 — Nil Rate Band, Spouse Exemption, and IHT400

Most estates in England do not pay inheritance tax. The majority of families who contact a solicitor in a panic about IHT discover, after a proper assessment, that the estate falls below the relevant thresholds. But for those estates that are above the thresholds, the process is more demanding — and missing deadlines costs real money in interest charges.

This guide covers the current thresholds, what triggers an IHT400 requirement, and the critical procedural steps that must happen before you can apply for probate.

The Nil Rate Band: £325,000

The standard inheritance tax nil rate band (NRB) for 2026 is £325,000. This is the amount an individual can leave without paying inheritance tax. The rate above this threshold is 40%.

This figure has been frozen since 2009 and remains unchanged for the 2025/26 and 2026/27 tax years under the current government's fiscal plans.

The Residence Nil Rate Band: Up to £175,000

An additional allowance, the Residence Nil Rate Band (RNRB), applies when a person leaves their main residence to a direct descendant (children or grandchildren). The RNRB for 2026 is £175,000 per person.

Combined with the standard NRB, a single person leaving their home to children can potentially leave £500,000 before inheritance tax applies. For married couples, the combined total can be £1,000,000 — see the transferable allowances section below.

The RNRB tapers for estates valued over £2 million, reducing by £1 for every £2 over that threshold.

Spouse and Civil Partner Exemption

Transfers between spouses and civil partners are completely exempt from inheritance tax. There is no limit. An estate of any size passing entirely to a surviving spouse or civil partner pays no inheritance tax at all.

Importantly, the nil rate band (both the standard NRB and the RNRB) can be transferred to the surviving spouse on death. If the first spouse to die leaves their entire estate to the surviving spouse and does not use their NRB at all, the surviving spouse's estate can claim twice the NRB — currently £650,000 standard NRB plus up to £350,000 RNRB — a combined potential threshold of £1,000,000 for a married couple with a qualifying home.

This transferred allowance does not happen automatically. The executor of the survivor's estate must claim it at probate using the appropriate forms.

What Makes an Estate "Excepted"

For deaths occurring on or after 1 January 2022, the rules for excepted estates simplified significantly. An estate qualifies as excepted — meaning you do not need to complete a full IHT return — if it meets all of the following criteria:

• Gross estate value is under £325,000 (or under £650,000 with a transferred nil-rate band from a predeceased spouse), or
• The entire estate passes to a spouse, civil partner, or qualifying charity and the gross value is under £3 million (exempt excepted estate)
• The deceased did not make lifetime gifts exceeding £250,000 in the seven years before death
• The deceased did not hold more than £250,000 in a single trust

For excepted estates, no separate HMRC forms are needed. You simply declare the gross and net estate values within the HMCTS probate application. The old IHT205 form was abolished for deaths after 1 January 2022.

When You Must Complete IHT400

Form IHT400 (Inheritance Tax Account) is required when:

• The estate exceeds the nil-rate band and does not qualify as an excepted estate
• The estate involves complex trust structures
• The deceased was domiciled outside the UK
• The estate involves agricultural or business property relief claims
• Lifetime gifts (potentially exempt transfers) exceed the thresholds

IHT400 is an exhaustive form covering every asset and liability, lifetime gifts, trust interests, and relief claims. It typically runs to many supplementary pages depending on the estate's composition. Many executors use a solicitor or tax adviser specifically for IHT400 completion even if they manage the rest of the estate themselves.

The 20-Working-Day Wait: Critical Timing Issue

Once you have submitted IHT400 to HMRC and paid any inheritance tax due, you must wait exactly 20 working days before applying for probate through HMCTS. During this time, HMRC processes the account and issues a unique digital clearance code by post.

The HMCTS online probate portal requires this code to proceed. If you apply for probate before the code arrives, the application will be stopped automatically — adding a further 15 to 20 weeks to the overall timeline.

The sequence is:

1. Complete IHT400
2. Submit to HMRC with any tax payment
3. Wait 20 working days
4. Receive HMRC clearance code
5. Apply to HMCTS for probate (entering the code in the application)

Do not shortcut this sequence.

IHT Payment Deadline

Inheritance tax is due by the end of the sixth month following the month of death. For example, if the death occurred in January, the tax is due by 31 July.

HMRC charges daily compound interest on unpaid inheritance tax after this deadline. Where the estate includes property that cannot easily be liquidated, HMRC allows tax on property to be paid in instalments — but the instalments begin by the standard deadline.

Reduced Rate for Charitable Giving

If at least 10% of the "net estate" (the portion above the nil-rate band) is left to charity, the inheritance tax rate on the remaining taxable estate reduces from 40% to 36%. For substantial estates, this can represent a significant saving worth structuring into the estate distribution.

The England Estate Settlement Guide includes a detailed IHT threshold decision tree, guidance on completing Form IHT400, the excepted estate declaration process, and the HMRC 20-day clearance timing plan. Get the guide

See more England guides →