Inheritance Tax on a £750,000 Estate
Inheritance tax on a £750,000 estate in the 2026-27 tax year: £170,000 for a single person without RNRB. With the residence nil rate band (home to descendants): £100,000. Married couple with home to descendants: £0. IHT is charged at 40% above the threshold.
A £750,000 estate will face inheritance tax in most scenarios. A single person pays £170,000 (40% on everything above £325,000). With the residence nil rate band, this reduces to £100,000. A married couple leaving their home to direct descendants can combine their allowances for a £1,000,000 threshold, resulting in IHT of £0.
How UK Inheritance Tax works
Inheritance Tax (IHT) is charged on the estate (property, possessions, and money) of someone who has died. In the 2026-27 tax year, the key thresholds are:
- Nil Rate Band (NRB): £325,000 — the first £325,000 of any estate is IHT-free
- Residence Nil Rate Band (RNRB): £175,000 — an additional allowance when passing a main home to direct descendants
- IHT rate: 40% on the estate value above the thresholds
- Reduced rate: 36% if 10% or more of the net estate is left to charity
IHT on a £750,000 estate — all scenarios
| Scenario | Threshold | Taxable | IHT due | Effective rate |
|---|---|---|---|---|
| Single (no RNRB) | £325,000 | £425,000 | £170,000 | 22.7% |
| Single + home to descendants | £500,000 | £250,000 | £100,000 | 13.3% |
| Married (no RNRB) | £650,000 | £100,000 | £40,000 | 5.3% |
| Married + home to descendants | £1,000,000 | £0 | £0 | 0.0% |
The Residence Nil Rate Band
The RNRB is an additional £175,000 threshold available when a main home is passed to direct descendants (children, grandchildren, stepchildren, adopted children, or foster children). Combined with the NRB, this gives individuals a £500,000 IHT-free threshold.
At £750,000, this estate is below the £2,000,000 taper threshold, so the full RNRB is available.
Married couples and civil partners
Transfers between spouses or civil partners are fully exempt from IHT — no tax is due on the first death. Additionally, any unused nil rate band and RNRB can be transferred to the surviving spouse, effectively doubling the thresholds on the second death.
For a £750,000 estate, a married couple passing their home to children has a combined threshold of £1,000,000, resulting in IHT of £0 compared to £170,000 for a single person without the RNRB.
Related calculations
- Check take-home pay on a £50,000 salary for income planning
- See IHT on a £850,000 estate
- See IHT on a £650,000 estate
- Calculate stamp duty on a £750,000 property
Frequently asked questions
How much inheritance tax is due on a £750,000 estate?
It depends on your circumstances. Without any residence nil rate band, a single person pays £170,000. A married couple passing a home to children may pay as little as £0.
What is the nil rate band for 2026-27?
The nil rate band is £325,000. This has been frozen since 2009 and is set to remain at this level until at least April 2030. Married couples and civil partners can transfer any unused portion to the surviving spouse.
Can I reduce my inheritance tax bill?
Common strategies include: leaving 10%+ of your net estate to charity (reduces the rate from 40% to 36%), making gifts during your lifetime (exempt after 7 years), using trusts, and ensuring you claim all available reliefs including Business Property Relief and Agricultural Property Relief.
What are potentially exempt transfers (PETs)?
Gifts made during your lifetime become fully exempt from IHT if you survive for 7 years after making them. If you die within 7 years, the gifts are added back to your estate, though taper relief reduces the IHT payable: 20% discount after 3 years, 40% after 4, 60% after 5, and 80% after 6 years.
Is my main home included in my estate?
Yes, your main home is part of your estate for IHT purposes. However, if you leave it to direct descendants, you may qualify for the Residence Nil Rate Band of £175,000 (£350,000 for married couples), which gives an additional IHT-free allowance on top of the £325,000 nil rate band.
Total value of the estate including property, savings, and investments
Is the main residence being left to direct descendants?
Are the beneficiaries children, grandchildren, or their spouses?
Unused nil rate band transfers between spouses, effectively doubling the threshold
% of net estate left to charity — 10%+ qualifies for a reduced 36% IHT rate
Value of gifts (potentially exempt transfers) made in the 7 years before death