What is the UK Inheritance Tax threshold in 2026/27?

£325,000 nil-rate band + £175,000 residence nil-rate band (when main home passes to direct descendants) = £500,000 per individual. Married couples can transfer unused thresholds at the second death, giving a combined IHT-free estate up to £1,000,000. Above £2m the RNRB tapers. IHT is charged at 40% above the combined thresholds (36% if 10%+ of net estate goes to charity).

Are pensions included in UK Inheritance Tax?

Currently (2026/27) no - DC pensions pass to nominated beneficiaries outside the IHT estate, income-tax-free if death before age 75 and at beneficiary's marginal rate after 75. From 6 April 2027 pensions will be included in IHT for the first time - the biggest IHT change in a generation. Higher-net-worth families should seek professional advice on estate planning for the 2025-2027 transition window.

How long does UK probate take?

Typically 3-12 months total. Listing the estate: 4-12 weeks. Completing IHT forms: 2-8 weeks. Probate Registry processing: 4-12 weeks (currently slower in 2025-26 due to backlogs - up to 16 weeks for some cases). Distribution and final accounts: 1-3 months after Grant. Executors should hold a reserve for at least 6 months after Grant to cover any Inheritance Act 1975 claims by family members.

Probate and Inheritance Tax UK guide 2026/27

Last reviewed by the UK Tax Drag editorial team · 12 May 2026 · How we review · Next review due 12 November 2026 · See what changed · Report an error

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What you need to know: Probate and Inheritance Tax - UK 2026/27

Quick answer: UK IHT 2026/27: nil-rate band £325,000 + residence nil-rate band £175,000 when main home passes to direct descendants. Married couples can transfer unused thresholds, giving a combined IHT-free estate up to £1,000,000 . Above thresholds: 40% IHT (or 36% if 10% of net estate left to charity). Probate process typically takes 3-12…

Key points:

Mark’s transferred NRB: £325,000
Sarah’s own RNRB: £175,000 (home passing to children)
Mark’s transferred RNRB: £175,000

UK IHT 2026/27: nil-rate band £325,000 + residence nil-rate band £175,000 when main home passes to direct descendants. Married couples can transfer unused thresholds, giving a combined IHT-free estate up to £1,000,000. Above thresholds: 40% IHT (or 36% if 10% of net estate left to charity). Probate process typically takes 3-12 months. From April 2027, pension benefits will be included in IHT estate - a major change requiring updated estate planning. Executors should expect 4-6 weeks for Grant of Probate after application; longer if HMRC has IHT questions.

The IHT thresholds explained

Threshold	2026/27 amount	Notes
Nil-rate band (NRB)	£325,000	Frozen until at least April 2030
Residence nil-rate band (RNRB)	£175,000	When main home passes to direct descendants (children, grandchildren)
Transferable NRB (TNRB)	up to £325,000	Any unused NRB from a pre-deceased spouse
Transferable RNRB	up to £175,000	Any unused RNRB from a pre-deceased spouse
RNRB taper	Reduces above £2m estate	£1 reduction per £2 over £2m; fully gone at £2.7m
IHT rate	40%	On amount above combined thresholds
Reduced IHT rate	36%	If 10%+ of net estate left to charity

Worked example: married couple with main home

Mark dies in 2024 with no IHT (his £325k NRB + £175k RNRB unused, all assets to spouse).

His widow Sarah dies in 2026. Her estate: family home £600k, savings/investments £250k, total £850k.

Sarah’s own NRB: £325,000
Mark’s transferred NRB: £325,000
Sarah’s own RNRB: £175,000 (home passing to children)
Mark’s transferred RNRB: £175,000
Total IHT-free threshold: £1,000,000
Estate £850k < £1m: £0 IHT

The £1m combined threshold protects most family estates. Above £2m, RNRB tapers - large estates lose some of the £175k RNRB benefit.

The April 2027 pension IHT change - major rework needed

Significant change aheadFrom 6 April 2027, defined contribution pensions and unused pension funds will be brought within IHT for the first time. Currently (and until April 2027): DC pensions pass to nominated beneficiaries outside IHT, income-tax-free if death before age 75, taxable at beneficiary marginal rate if death after 75. From April 2027: pensions counted as part of the IHT estate. This is the biggest IHT change in a generation and will materially affect estate planning for higher-net-worth families.

Detailed rules and transitional provisions are still being consulted on. Implications likely include:

Pensions cease to be "leave-to-children" tax shelter for estates above £1m
Strategies to "spend pension last" become less valuable
Earlier extraction (via drawdown) into ISA/GIA may become more attractive
Charitable giving via pensions may grow as a planning tool

If you are over 60 with substantial pension wealth and an IHT-exposed estate, professional advice for the 2025-2027 window is strongly recommended.

The Grant of Probate process

Day 0Death registeredWithin 5 days. Hospital or GP confirms death. Register at local Register Office. Receive death certificate.

Week 1-2Find the will and notify beneficiariesLocate the will (often with solicitor or in personal papers). Identify named executor(s). Notify named beneficiaries.

Week 2-6List the estateCompile all assets (property, bank accounts, investments, pensions, life insurance, possessions over £500) and liabilities (mortgage, debts). Send each financial institution a death certificate.

Week 4-12Complete IHT forms (if applicable)For most estates: IHT205 (small estates under £325k, simplified). For larger estates: IHT400 plus supplementary forms. For exempt-spouse-only estates: IHT400 still required if value exceeds thresholds.

Week 8-12Pay any IHT dueFrom the estate funds (or executor’s personal money - reclaimed later). Must be paid before Grant of Probate is issued.

Week 12-18Apply for Grant of ProbateOnline or by post. Probate Registry processes in 4-12 weeks typically.

Month 4-9Distribute estatePay debts, settle bills, distribute remaining estate per will or intestacy. Hold back reserve for unexpected claims (Inheritance (Provision for Family and Dependants) Act 1975 claims can be made up to 6 months after Grant).

Month 9-12+Final accounts and closureProvide beneficiaries with final estate accounts. Close estate bank account. File final SA return for the deceased if needed.

Deeds of Variation - rearranging inheritance

Beneficiaries can use a Deed of Variation to redirect their inheritance to someone else within 2 years of death, with no IHT or CGT consequences. Common uses:

Skip a generation - inheritance redirected from adult child to grandchild
Equalise estates between siblings if the will treats them unequally
Direct to charity if the original beneficiary doesn’t need the funds
Correct outdated wills - e.g. dispositions before tax rule changes

All beneficiaries affected by the variation must agree in writing. Once executed, the deed is treated as if the will had said that in the first place.

What if there is no will (intestacy)

If the deceased died without a valid will, the estate is distributed under the Intestacy Rules (Administration of Estates Act 1925 as amended):

Surviving relatives	How estate is divided
Spouse + children	Spouse: personal possessions + £322,000 statutory legacy + half the remainder. Children: other half of remainder.
Spouse, no children	Spouse: entire estate
Children, no spouse	Children: equal shares
Parents, no spouse/children	Parents: equal shares
Siblings, no spouse/children/parents	Siblings: equal shares
No surviving relatives	Estate passes to the Crown (Bona Vacantia)

Cohabiting partners get NOTHING under intestacy.Unmarried partners have no automatic right to inherit under UK intestacy rules. They can claim under Inheritance (Provision for Family and Dependants) Act 1975 if they’ve cohabited for 2+ years, but this requires court application - expensive and uncertain. The fix: make a will. Cohabiting couples need this much more urgently than married couples.

Executor duties and personal liability

An executor is personally liable for:

Accurate IHT calculation and payment (HMRC can pursue executor for IHT shortfalls)
Notifying creditors via "statutory advertisement" (London Gazette + local paper) - 2 months for claims
Distributing per the will and intestacy rules
Filing final SA return for the deceased
Holding back funds for unexpected claims (Inheritance Act 1975 challenges)

Many executors use a solicitor for the legal work (Grant application, IHT) while handling administrative matters themselves. Solicitor fees typically 1-5% of estate value, or fixed fee £1,500-£5,000 for simple estates.

Calculate IHT exposure

The inheritance tax calculator models your estate against the nil-rate band, residence nil-rate band, and transferable bands from a pre-deceased spouse.

Open the IHT calculator

Sources and references

IHT framework from gov.uk Inheritance Tax. Residence nil-rate band from gov.uk RNRB. Probate process from gov.uk applying for probate. April 2027 pension IHT changes from Autumn Budget 2024.

UK Tax Drag is educational and not regulated financial, tax, legal or family advice - see the disclaimer for the full position. For decisions with material legal or family consequences (divorce, probate, separation), specialist advice from a solicitor and/or financial adviser is strongly recommended.

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