The UK Inheritance Tax Threshold in 2026/27: £325k, £500k or £1m?

Last reviewed: 24 May 2026 by the MP Estate Planning editorial team. Jurisdiction: England and Wales. Scotland and Northern Ireland have different probate and intestacy rules; the IHT thresholds are UK-wide.

What is the inheritance tax threshold?

The UK inheritance tax (IHT) threshold — formally the nil-rate band (NRB) — is the amount of an estate that can pass to your beneficiaries without any IHT being charged. Anything above the threshold is normally taxed at 40% (gov.uk — Inheritance Tax).

For the 2026/27 tax year:

• Nil-rate band (NRB): £325,000 per individual (gov.uk — Inheritance Tax)
• Residence nil-rate band (RNRB): £175,000 per individual where a qualifying home is left to direct descendants (gov.uk — Work out and apply the RNRB)
• Combined single-person allowance: £500,000
• Combined married couple allowance: £1,000,000 (with full use of the transferable nil-rate band — see below)

All three figures are frozen until 5 April 2031. The original Autumn Budget 2024 freeze ran to 5 April 2030 (gov.uk — NRB and RNRB from 6 April 2028) and Budget 2025 extended it by one further year via Finance Bill 2025-26 (gov.uk — Budget 2025 OOTLAR).

How the £1 million couple allowance actually works

The “£1 million” figure that gets quoted everywhere isn’t a separate allowance — it’s the result of stacking four allowances when a married or civil-partnered couple plans correctly:

This figure depends on three conditions being met:

1. The first spouse to die leaves their assets to the survivor (or otherwise wastes none of their NRB/RNRB). The unused NRB then transfers as a percentage — see “transferable nil-rate band” below (gov.uk — Form IHT402).
2. The surviving spouse leaves a qualifying residence to direct descendants — children, step-children, adopted or foster children, grandchildren and their descendants, and their spouses (gov.uk — RNRB guidance).
3. The combined estate is not above £2 million — above that the RNRB tapers away £1 for every £2 over (gov.uk — RNRB tapering).

If any of these conditions break, the allowance shrinks. The transferable nil-rate band is capped at 100% — even after multiple marriages the survivor cannot claim more than one extra NRB in total (gov.uk — IHT402).

The 40% rate — and the 36% charity rate

IHT is normally charged at 40% on the value above the available allowance (gov.uk — Inheritance Tax). One widely-overlooked discount: if you leave at least 10% of the “baseline amount” of your estate to a registered charity, the IHT rate on the rest drops to 36% (HMRC Inheritance Tax Manual — IHTM45000 Reduced rate for charitable gifts).

The “baseline amount” is calculated under the statutory formula at Schedule 1A, Inheritance Tax Act 1984 — broadly, the net estate after deducting reliefs (such as Business or Agricultural Property Relief) and any nil-rate band or transferable nil-rate band (HMRC — IHTM45013 calculating the baseline amount). The claim is made on Form IHT430 alongside the main IHT return. In our experience, the 36% rate is one of the most underused planning levers for charitably-minded clients — the maths often means the charity gift is partly or wholly self-funded by the tax saving.

Worked examples — at the current 2026/27 rates

Example 1: Single homeowner, estate £450,000

Estate is below the £500,000 single-person allowance (NRB £325k + RNRB £175k). Provided the home passes to children or grandchildren, IHT is £0.

Example 2: Single homeowner, estate £800,000

Allowance is £500,000. Taxable estate = £300,000. IHT bill = £120,000 (£300,000 × 40%).

Example 3: Married couple, second-death estate £1,200,000, family home to children

Stacked allowance = £1,000,000. Taxable estate = £200,000. IHT bill = £80,000.

Example 4: Married couple, second-death estate £2,400,000, family home to children

Estate exceeds the £2 million RNRB taper threshold (gov.uk — RNRB tapering). RNRB is reduced £1 for every £2 the estate exceeds £2m: £400,000 over → £200,000 of RNRB lost. Available allowance = £1,000,000 − £200,000 = £800,000. Taxable = £1,600,000. IHT bill = £640,000.

Example 5: Same as Example 4, but with a 10% charity gift

If at least 10% of the baseline amount goes to charity, the rate on the remaining taxable estate drops from 40% to 36% (HMRC IHTM45000). The arithmetic can work out so the charity gift is, in part or in whole, funded by the tax saving rather than the family — but the calculation is sensitive to whether the will is drafted to specifically meet the 10% test or simply leaves a fixed amount (HMRC IHTM45013). Speak to a STEP-qualified estate planner before relying on the reduced rate.

The 7-year rule on gifts — and where most articles get it wrong

If you give assets away during your lifetime and survive the gift by seven years, the value falls completely outside your estate for IHT (gov.uk — Rules on giving gifts). Survive fewer than seven years, and the gift may be brought back in — how it is taxed depends on the type of gift and the total you gave away in the 7 years before death.

The most common gifts — outright cash or asset transfers to individuals — are potentially exempt transfers (PETs). They become chargeable only if you die within 7 years. If you die more than 3 years after the gift, taper relief (HMRC IHTM14612) reduces the tax due (not the gift value) on a sliding scale set out at HMRC Inheritance Tax Manual IHTM14612 (taper relief):

The point most articles miss: taper relief only applies to gifts where the total of all gifts in the 7 years before death exceeds the £325,000 NRB. If your cumulative gifts stay under £325,000, no IHT is due on them at all — taper is irrelevant (HMRC IHTM14612).

Gifts that are always exempt — regardless of the 7-year rule

In our experience, the normal expenditure out of income exemption is the most powerful — and most underused — gifting lever in UK IHT planning. A grandparent paying £2,000/month from pension income towards a grandchild’s school fees can give £24,000 a year, completely outside the 7-year rule, provided the conditions in gov.uk’s gifts guidance are met and properly documented.

The transferable nil-rate band (TNRB) — how the spouse rule actually works

When the first spouse or civil partner dies, any unused percentage of their NRB and RNRB transfers to the survivor. It is claimed on the survivor’s death using form IHT402 within 2 years of the second death (gov.uk — IHT402 claim form); HMRC may extend the deadline in practice.

It’s a percentage transfer, not a cash transfer — which matters when the thresholds have changed between the two deaths:

• If the first spouse died and used none of their NRB (e.g. left everything to the survivor), 100% of their NRB transfers. On the survivor’s death, the survivor’s estate gets 2 × current NRB.
• If the first spouse used half of their NRB, 50% transfers. Survivor gets 1.5 × current NRB.
• The TNRB is capped at 100% — even multiple marriages cannot give you more than 2 NRBs in total (gov.uk — IHT402).

In our experience this is one of the simpler pieces of estate planning to get right and, in our experience, one of the more expensive to get wrong. A common pattern we see is substantial assets being left directly to children in the first will, accidentally using up part of the first NRB that could otherwise have passed to the survivor and grown with any future indexation.

The £2 million taper trap — and how to plan around it

The residence nil-rate band tapers away for larger estates: for every £2 the gross estate exceeds £2 million, you lose £1 of RNRB (gov.uk — RNRB). That means:

• A single estate fully loses the £175,000 RNRB at £2,350,000.
• A married couple can lose £350,000 of combined RNRB by £2,700,000.

The cliff edge means an estate at £2,000,001 has a meaningfully lower allowance than one at £2,000,000. In our experience, planning to keep the gross estate under £2 million — through lifetime gifts, charitable giving, or qualifying business / agricultural property — can be worth more than the value of the gifts themselves for clients in the £2m–£2.7m band.

The £2 million taper threshold is also frozen at the current level until 5 April 2031 (gov.uk — NRB and RNRB from 6 April 2028; Budget 2025 OOTLAR).

One important relief: the downsizing addition. If the deceased sold or downsized their home on or after 8 July 2015 and left equivalent assets to direct descendants, the estate can still claim an RNRB equivalent to the value of the former home, claimed via Form IHT435 (gov.uk — RNRB and downsizing). The detailed calculation is complex and benefits from professional advice.

Gifts with reservation of benefit — the most common trap

Gifting an asset while continuing to benefit from it is caught by the gift with reservation of benefit (GWROB) rules. The classic example: giving your house to your children but continuing to live in it rent-free. HMRC treats the gift as still part of your estate for IHT — defeating the entire purpose of the gift (gov.uk — Work out Inheritance Tax due on gifts).

The only watertight way around it is to pay full market rent to the recipient, reviewed regularly. Where GWROB doesn’t apply but there is still a benefit, the parallel Pre-Owned Asset Tax (POAT) regime may impose an annual income tax charge instead (broadly, on the open-market rent of the asset). Both regimes are complex and case-specific.

What changes between now and 2027 — three rule shifts every plan must consider

1. Pensions become subject to IHT — from 6 April 2027

Currently, most unused defined-contribution pensions sit outside a person’s estate for IHT. This changes fundamentally on 6 April 2027: most unused pension funds and pension death benefits will be brought into the estate for IHT (gov.uk — IHT on unused pension funds and death benefits).

Exclusions remain for death-in-service payments from registered schemes, dependants’ scheme pensions, and transfers to UK long-term-resident spouses or registered charities (same source). From April 2027 the personal representatives of the estate — not the pension scheme administrator — will be liable for reporting and paying any IHT due, and can issue “withholding notices” requiring schemes to retain up to 50% of pension funds for up to 15 months while the position is settled.

HMRC estimates approximately 10,500 estates a year will pay IHT for the first time as a result of the change, and roughly 38,500 will pay more than they otherwise would (gov.uk policy paper).

In our experience, if pensions are a meaningful part of your wealth, the 2026/27 tax year is the right time to review whether to draw pension benefits earlier, rebalance towards ISAs, or use the pension commencement lump sum differently — before the rules change.

2. Business and Agricultural Property Reliefs capped — from 6 April 2026 (live now)

Until 6 April 2026, Business Property Relief (BPR) and Agricultural Property Relief (APR) gave 100% IHT relief on unlimited qualifying assets. From 6 April 2026:

• 100% relief on the first £2.5 million of combined business + agricultural property per individual (originally proposed at £1m in October 2024 and raised to £2.5m after consultation — Rossmartin — APR/BPR threshold £1m → £2.5m).
• 50% relief above £2.5 million — an effective IHT rate of 20% rather than the headline 40% (Saffery — APR/BPR reforms from 6 April 2026).
• The £2.5m allowance is transferable between spouses — couples can shelter up to £5 million (same source).
• AIM shares lose half their relief: from 100% BPR to 50% (effective 20% IHT). AIM shares do not use the £2.5m allowance (House of Commons Library — Changes to APR and BPR).

3. The non-dom / long-term residence rules changed — from 6 April 2025

The old domicile-based IHT regime was replaced with a long-term residence test: anyone UK-resident for at least 10 of the past 20 tax years has their worldwide estate in IHT scope (gov.uk — Inheritance Tax if you’re a long-term UK resident). This is a meaningful tightening of the old “15 of 20 years” deemed-domicile test (HMRC IHTM47020). The change affects non-doms, people returning to the UK, and the spouse exemption where one spouse isn’t a long-term UK resident. It is case-specific — speak to a CTA-qualified tax adviser.

How and when IHT is paid

IHT is normally due by the end of the sixth month after the month of death — for example, if death was in January, IHT is due by 31 July (gov.uk — Pay your Inheritance Tax bill). HMRC charges interest on amounts paid after that deadline at the published rate (currently above 8%) (gov.uk — IHT thresholds and interest rates).

The executors normally need to pay at least some IHT before applying for the grant of probate, which can create cash-flow problems for estates dominated by property. For qualifying assets — primarily land, buildings, and the value of an interest in a business — IHT can be paid in up to 10 annual instalments (gov.uk — Yearly instalments). The first instalment is still due within six months of the end of the month of death; the remaining nine attract interest in most cases. If the asset is sold during the 10-year period, all remaining tax becomes payable immediately.

Strategies that actually reduce your IHT exposure

In our experience, the realistic levers — in approximate order of impact for typical homeowner clients in 2026/27 — are:

1. Use both spouses’ allowances properly. A common — and costly — miss in DIY planning is using up part of the first spouse’s NRB by leaving substantial assets directly to children in the first will rather than the survivor (gov.uk — IHT402).
2. Plan around the £2m RNRB taper. If the combined estate is between £2m and £2.7m, lifetime gifts or charitable bequests that bring it under £2m can release a disproportionate amount of allowance (gov.uk — RNRB tapering).
3. Use the normal expenditure out of income exemption properly. Documented, regular gifts from surplus income are exempt from the 7-year rule entirely — no cap, no taper (gov.uk — gifts).
4. Annual gifting at £3,000–£6,000/year, plus wedding gifts, plus £250 small gifts — small individually, meaningful over a decade (gov.uk).
5. The 10% charity rule for the 36% rate on the remaining estate. in many cases the maths leaves the family no worse off after the tax saving (HMRC IHTM45000).
6. Life insurance written in trust to cover an expected IHT bill — doesn’t reduce the tax but ensures beneficiaries don’t have to sell illiquid assets at distress prices.
7. Trusts: discretionary trusts, loan trusts, gift-and-loan trusts, and family investment companies (FICs) all have specific roles. They are not a magic bullet — they carry their own ongoing tax burdens (entry, periodic, exit charges) and reporting via the Trust Registration Service. Always set up with input from a STEP-qualified estate planner.
8. Pension review before April 2027. Until the rules change, pensions remain outside IHT (gov.uk pensions IHT policy paper) — there is a window to take advice on whether to draw down ISAs first, leaving pension wealth to the next generation.
9. Business and farming families: revisit succession plans urgently in light of the £2.5m BPR/APR cap. Cross-option agreements, life cover on shareholders, and earlier transfers of qualifying assets all need re-modelling (Commons Library — APR and BPR changes).

Common misconceptions about the threshold

• “Only the wealthy pay it.” HMRC’s record £7.5 billion IHT receipts in 2023-24 (House of Commons Library) reflect how many ordinary homeowner estates are now affected as house prices outpace the frozen NRB.
• “I have a will, so my estate is fine.” A will controls who inherits, not how much tax they pay. A poorly-structured will can actively waste IHT allowances (gov.uk — IHT402).
• “My house won’t be counted because I’m leaving it to my kids.” The home is always counted in the estate. The RNRB gives an extra allowance — it doesn’t make the property outside the scope of IHT (gov.uk — RNRB).
• “I can give £3,000 a year to avoid IHT entirely.” The £3,000 annual exemption is useful but small; the bigger lever for income-rich clients is “normal expenditure out of income” (gov.uk — gifts).
• “Gifts more than 7 years before death are always outside the scope of IHT.” Mostly true for outright gifts. Gifts where the donor still benefits are caught by the gift-with-reservation-of-benefit rules and stay in the estate regardless of timing (gov.uk — IHT due on gifts).

When to start planning

In our experience, in our experience the earlier the better, because much of the available IHT planning relies on time. The 7-year clock on gifts only starts when the gift is made. Trust structures take time to set up and ongoing time to manage. The normal-expenditure-out-of-income exemption needs a documented “pattern” before HMRC will accept it.

If you are a homeowner over 60 with assets that put your estate above £500,000 (or £1 million as a couple), the right time to start is generally now. If the upcoming pension-into-IHT change (April 2027) affects you, the time to review is typically within this 2026/27 tax year (gov.uk pensions IHT policy paper).

Frequently asked questions

What is the current UK inheritance tax threshold?

For the 2026/27 tax year, the standard nil-rate band is £325,000 per individual (gov.uk). Add the £175,000 residence nil-rate band where a qualifying home passes to direct descendants, and the threshold rises to £500,000 per person — or up to £1 million for married couples or civil partners.

When will the IHT threshold change?

The NRB, RNRB and the £2 million RNRB taper threshold are all frozen until 5 April 2031 (gov.uk — NRB freeze; Budget 2025 OOTLAR). Inflation will progressively pull more estates into IHT until then.

Is inheritance tax 40% on everything above £325,000?

No. The 40% rate only applies to value above your available allowance — which is normally more than £325,000 once you factor in the RNRB (gov.uk — RNRB), the transferable nil-rate band from a deceased spouse (gov.uk — IHT402), exempt assets passing to a surviving spouse, and reliefs like BPR or APR. The rate drops to 36% if at least 10% of the baseline amount goes to charity (HMRC IHTM45000).

Does the £1 million allowance need a special will?

It doesn’t strictly require a special will, but the way the will is drafted determines whether the allowances are fully captured. A poorly-drafted will can leave substantial assets directly to children on the first death, accidentally using part of the first spouse’s NRB rather than letting 100% transfer to the survivor (gov.uk — IHT402). In our experience, any will written before 2017 (when the RNRB was introduced) deserves a review.

Are pensions counted in the inheritance tax threshold?

Not currently — most unused defined-contribution pensions sit outside the estate for IHT until 5 April 2027. From 6 April 2027, most unused pension funds and pension death benefits will be included in the estate for IHT purposes, with exceptions for death-in-service payments and transfers to a UK long-term-resident spouse or charity (gov.uk pensions IHT policy paper).

What is the residence nil-rate band and who qualifies?

The RNRB is an extra IHT allowance of £175,000 per individual where the deceased’s estate includes a qualifying residential interest left to direct descendants — children, step-children, adopted or foster children, grandchildren, and their spouses (gov.uk — RNRB). It tapers away by £1 for every £2 the estate exceeds £2 million.

Can I avoid the £2 million taper by giving away assets during my lifetime?

Yes — gifts that survive the 7-year clock fall out of your estate completely (gov.uk — gifts), which can bring the estate back below the £2m threshold and restore the RNRB. In our experience, planning around the taper edge is one of the highest-leverage moves for estates in the £2m–£2.7m range.

How is IHT actually paid?

IHT is normally due 6 months after the end of the month of death (gov.uk — Pay your IHT bill). For property and qualifying business/agricultural assets, IHT can be paid in 10 annual instalments (gov.uk — Yearly instalments). HMRC accepts payment via the Direct Payment Scheme from the deceased’s bank.

Talk to us before making a move

If you’re reading this because you’re trying to work out whether your own estate is over the threshold, the answer is usually “yes, sooner than you think — but here’s what to do about it.” In our experience, inheritance tax planning is one of the few areas of personal finance where doing it five years earlier rather than five years later can, in some cases, save a family a substantial sum, depending on the size and structure of the estate.

We offer a free initial consultation to discuss your specific position — your assets, your family structure, and what you actually want to achieve — and lay out the realistic options. Our pricing is transparent and fixed — no hourly clocks running.

Related guides

• A widow’s or widower’s guide to inheritance tax in the UK
• Inheritance tax when the second parent dies
• How to claim the transferable nil-rate band using form IHT402
• How to reduce inheritance tax on property in the UK
• The 7-year IHT rule on gifts, explained with examples
• Our inheritance tax planning service

Sources

Every load-bearing claim in this article is referenced inline. Primary sources used:

1. HM Revenue & Customs / gov.uk — Inheritance Tax (main guidance page).
2. HM Revenue & Customs / gov.uk — Rules on giving gifts.
3. HM Revenue & Customs / gov.uk — Pay your Inheritance Tax bill, and Yearly instalments.
4. HM Revenue & Customs / gov.uk — Work out and apply the residence nil rate band.
5. HM Revenue & Customs / gov.uk — Work out Inheritance Tax due on gifts.
6. HM Revenue & Customs / gov.uk — Inheritance Tax if you’re a long-term UK resident.
7. HM Revenue & Customs / gov.uk — Form IHT402 — claim to transfer unused nil rate band.
8. HM Revenue & Customs / gov.uk — Inheritance Tax nil-rate band and residence nil-rate bands from 6 April 2028 (Autumn Budget 2024 freeze).
9. HM Revenue & Customs / gov.uk — Budget 2025 — Overview of tax legislation and rates (OOTLAR) (one-year freeze extension to 2031).
10. HM Revenue & Customs / gov.uk — Inheritance Tax on unused pension funds and death benefits (April 2027 reform).
11. HM Revenue & Customs / gov.uk — Inheritance Tax thresholds and interest rates.
12. HMRC Inheritance Tax Manual — IHTM14612: Taper relief.
13. HMRC Inheritance Tax Manual — IHTM45000: Reduced rate for charitable gifts (contents).
14. HMRC Inheritance Tax Manual — IHTM45013: Calculating the baseline amount.
15. HMRC Inheritance Tax Manual — IHTM47020: Long-term UK residence test.
16. House of Commons Library — Inheritance Tax: a basic guide (NRB history, receipts data).
17. House of Commons Library — Changes to agricultural and business property reliefs for inheritance tax (CBP-10181).
18. Saffery — APR and BPR reforms from 6 April 2026.
19. Rossmartin — APR and BPR threshold increase £1m → £2.5m.

How much can you inherit tax-free in the UK — the straightforward answer

Before working through allowances, tapering rules and transferable bands, most people visiting this page want one clear figure. The honest answer is that there is no single universal amount — what falls outside the scope of IHT depends on who is inheriting, what they are inheriting, and how the deceased’s allowances were used during their lifetime. That said, the practical starting points are well established under HMRC’s inheritance tax framework.

For a single person dying in 2026/27, the estate typically pays no IHT on the first £325,000 (the nil-rate band). Where a residential property passes to direct descendants, an additional £175,000 residence nil-rate band may apply, bringing the effective threshold to £500,000. For a surviving spouse or civil partner inheriting on second death, both sets of allowances can generally be combined, producing a potential threshold of up to £1,000,000 — though this figure depends on how the first estate was structured and whether the residence nil-rate band is not tapered away by a larger estate.

It is worth noting that only around 1 in 25 estates paid IHT in 2021/22 according to HMRC receipts data — so for many families, the threshold question is one of reassurance rather than urgent action. For those estates that do fall within scope, however, the consequences can be significant: HMRC reports an average IHT bill of approximately £534,000, which underlines why understanding your position before death — not after — is where planning has its greatest value.

What beneficiaries actually receive

It is important to clarify that IHT is a charge on the estate, not on the beneficiary directly. In most cases, the liability is settled by the executors before assets are distributed, meaning beneficiaries typically receive their inheritance net of any tax already paid. The amount any individual inherits tax-free is therefore shaped by the estate’s overall position, not by a personal annual allowance for the recipient.

UK IHT versus US estate and inheritance tax — a note for international readers

Some visitors to this page may be researching from a US context or have cross-border family situations. It is worth clarifying that UK inheritance tax is a charge on the deceased’s estate, levied before distribution. This differs from US estate tax (a federal charge on estates above a high threshold) and from state-level inheritance taxes in certain US states, which are charged on what the beneficiary receives. The two systems are structurally different, and US-based planning strategies — such as stepped-up basis rules — have no direct equivalent in England and Wales. If your estate has a US dimension, we would generally recommend taking separate advice from a practitioner qualified in both jurisdictions, as the interaction between the two regimes can produce unexpected results.

Inherited pensions — a separate consideration from April 2027

Currently, pension funds typically fall outside the scope of IHT and are not counted when calculating whether the threshold has been exceeded. From 6 April 2027, this is expected to change materially — unused pension funds will generally be brought within the taxable estate. For families where pension wealth forms a significant part of the overall picture, this rule shift may move an estate that currently sits below the threshold into a position where IHT becomes payable. This is addressed in more detail in the rule changes section above.

Common questions about the inheritance tax threshold

How much can you inherit in the UK without paying tax?

There is no fixed amount that a beneficiary can personally receive free of IHT, because the tax is charged on the estate before distribution rather than on what each individual inherits. What determines whether tax is due is the total value of the deceased’s estate measured against their available allowances — typically £325,000 for a single person, or up to £500,000 where a qualifying residence passes to direct descendants. If the estate falls below those thresholds, beneficiaries will generally receive their inheritance without any IHT having been deducted. In our experience, the confusion here often arises because people conflate the estate-level charge with a personal recipient allowance — they are not the same thing.

How much can I inherit from my parents tax-free in the UK?

On a second-death estate where both parents’ allowances have been preserved and the family home passes to children or grandchildren, the combined threshold may reach £1,000,000. Above that figure, IHT at 40% applies to the excess. Whether the full £1 million threshold is available depends on several factors: whether the first parent’s nil-rate band was fully used, whether the residence nil-rate band is tapered (it reduces for estates above £2 million), and whether the property qualifies. The transferable nil-rate band rules are explained in detail in the section above.

Who pays inheritance tax on death?

IHT is the legal responsibility of the executors or personal representatives of the estate. They are required to calculate the liability, complete the necessary HMRC returns, and arrange payment — generally before probate is granted. In most cases, funds to pay the tax are drawn from the estate itself, often from cash or savings held in the deceased’s bank accounts. Where the estate is largely illiquid (for example, tied up in property), executors may need to arrange interim financing. HMRC provides further detail on the process at gov.uk/paying-inheritance-tax. Beneficiaries do not pay IHT directly, though they bear its economic cost through a reduced inheritance.

How do I avoid 40% inheritance tax in the UK?

No approach can guarantee the elimination of an IHT liability, and any strategy that claims to do so should be treated with caution. That said, there are a number of well-established, HMRC-recognised routes that may legitimately reduce exposure: making use of annual gift exemptions, structuring larger lifetime gifts to start the seven-year clock, ensuring transferable nil-rate bands are properly claimed on second death, making qualifying charitable gifts to access the reduced 36% rate, and reviewing pension nominations in advance of the April 2027 changes. With £7.5 billion collected in IHT receipts in 2023/24 — a record high — the financial cost of inaction is considerable. Our team can help you map your estate against current thresholds and identify which planning steps are appropriate for your circumstances.

Can I gift £100,000 to my son in the UK?

Yes, in most cases a parent can make a gift of £100,000 to a child during their lifetime — there is no legal prohibition on doing so. However, whether that gift is effective for IHT purposes depends on timing and survival. A gift of this size would generally exceed the £3,000 annual exemption and would therefore be treated as a potentially exempt transfer (PET). If the donor survives seven years from the date of the gift, it typically falls entirely outside the scope of IHT. If they die within seven years, it may be brought back into the estate and subject to taper relief on a sliding scale. The gift must also be genuine — if the donor continues to benefit from the asset in any way, HMRC may treat it as a gift with reservation, which carries different and generally less favourable consequences.