Inheritance Tax Explained

Not every estate is subject to inheritance tax, but where it applies, it must be addressed as part of the probate process, often before the Grant of Probate is issued.

As of 2026, inheritance tax may apply where the total value of the estate exceeds £325,000. The rate is 40% on the amount above that threshold. An additional allowance of up to £175,000 may apply where a residential property passes to direct descendants, potentially increasing the effective threshold to £500,000.

Married couples and civil partners can leave assets to each other free of inheritance tax, and any unused allowance can be transferred to the surviving partner's estate, potentially doubling the threshold available on the second death.

Reliefs may also apply in certain circumstances, including for business and agricultural property, which can significantly reduce or eliminate a liability.

Accurate valuation of all assets, including property, savings, and investments, is essential before the application is made. Errors in valuation or reporting can delay the grant and may result in additional tax liability or penalties.

At MJV Solicitors, we guide executors through the inheritance tax position as part of the wider probate process.

For more information about the probate process and how MJV Solicitors can help, read our complete guide to Probate and Estate Administration.

Inheritance Tax FAQs

When does inheritance tax apply?
As of October 2026, the standard inheritance tax nil rate band is £325,000. Inheritance tax is generally charged at 40% on the taxable value of an estate above the available allowances, subject to any exemptions and reliefs that apply.
Is there an additional allowance for property?
As of October 2026, an additional residence nil rate band of up to £175,000 may be available where a qualifying home passes to direct descendants. This allowance starts to be reduced where the estate is worth more than £2 million.
Can inheritance tax be reduced?
Yes. As of October 2026, exemptions and reliefs may reduce the inheritance tax payable depending on the circumstances. Unused nil rate bands may also be transferred between spouses and civil partners, subject to the relevant conditions.
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