Inheritance Tax Thresholds Remain Frozen – 2026

Inheritance Tax thresholds remain frozen, meaning that increasing property and asset values could result in more estates becoming liable for Inheritance Tax over time.

The standard Inheritance Tax Nil-Rate Band remains at £325,000, while the additional Residence Nil-Rate Band remains at up to £175,000 where a qualifying home is passed to direct descendants.

For qualifying estates, this can potentially allow an individual to pass on up to £500,000 before Inheritance Tax becomes payable. Where allowances are available and transferred between spouses or civil partners, a qualifying surviving spouse or civil partner's estate may potentially benefit from allowances of up to £1 million.

The Residence Nil-Rate Band begins to reduce where an estate exceeds £2 million.

With property and other asset values changing over time while these thresholds remain fixed, it is increasingly important to understand the potential value of your estate and whether Inheritance Tax could affect the inheritance you intend to leave to your loved ones.

Reviewing your Will and wider Estate Planning can help ensure your arrangements continue to reflect your circumstances, wishes and the current Inheritance Tax rules.

Source: HM Revenue & Customs (HMRC) / GOV.UK