How much inheritance tax is payable on a £700,000 estate?

A £700,000 estate with only the standard £325,000 nil-rate band owes £150,000 in Inheritance Tax (an effective 21.4%). If a home passes to direct descendants, the £175,000 residence nil-rate band cuts that to £80,000.

What does a married couple pay on a £700,000 estate?

If a married couple or civil partners combine both nil-rate bands and both residence bands (up to £1,000,000 of allowances when a home passes to children), a £700,000 estate can pass with no Inheritance Tax at all.

What rate is UK inheritance tax?

Inheritance Tax is 40% on the value of the estate above the available nil-rate bands. It falls to 36% if at least 10% of the net estate is left to charity. Gifts to a UK spouse or civil partner are exempt.

Are the thresholds going to change?

No. The £325,000 nil-rate band, the £175,000 residence nil-rate band and the £2,000,000 taper threshold are frozen until 5 April 2030 (end of tax year 2029-30), so as asset values rise more estates are pulled into IHT each year.

What is the Inheritance Tax on a £700,000 Estate (UK)?

UK Inheritance Tax on a £700,000 estate: £150,000 with one £325,000 nil-rate band, £80,000 if a home passes to children (adding the £175,000 residence band), and £0 for a married couple combining both bands. Uses 40% / 36% HMRC rates, frozen to 5 April 2030 (end of tax year 2029-30). It runs free in your browser on Gera Tools, with nothing uploaded.

Inheritance Tax on a £700,000 Estate (UK)

Name: Inheritance Tax on a £700,000 Estate (UK)
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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This page shows the UK Inheritance Tax due on a £700,000 estate under current HMRC rules. The calculator above is pre-filled with £700,000 — change it to your own figure. Inheritance Tax applies across the whole UK; there is no separate Scottish, Welsh or Northern Irish rate.

Inheritance tax on a £700,000 estate — three common cases

Scenario	Tax-free bands	IHT due	Effective rate
Single estate, no home to children	£325,000	£150,000	21.4%
Home left to children (adds RNRB)	£500,000	£80,000	11.4%
Married couple, both bands transferred	£1,000,000	£0	0.0%

Worked example — single estate of £700,000

Step	Amount
Net estate	£700,000
Less nil-rate band	−£325,000
Taxable estate	£375,000
Rate	40.0%
Inheritance Tax due	£150,000

Inheritance Tax is charged at a flat 40.0% on everything above the available bands (or 36.0% if 10%+ of the net estate goes to charity). The £325,000 nil-rate band always applies; the £175,000 residence nil-rate band is added only when a qualifying home passes to direct descendants.

The current UK Inheritance Tax rules

Allowance / rate	Amount	Notes
Nil-rate band (NRB)	£325,000	0% on this slice of every estate
Residence nil-rate band (RNRB)	£175,000	Only when a home passes to direct descendants
Taper threshold	£2,000,000	RNRB falls £1 for every £2 of estate above this
Standard rate	40.0%	On the estate above the available bands
Reduced charity rate	36.0%	If ≥10% of the net estate goes to charity

A surviving spouse or civil partner can inherit the unused percentage of a late partner’s nil-rate band and residence nil-rate band — potentially doubling both, so a couple can shelter up to £1,000,000 (2 × £325,000 + 2 × £175,000) when a home passes to children.

Sources & as-of

Nil-rate band, residence nil-rate band, 40% / 36% rates, £2m taper: GOV.UK — Inheritance Tax.
Bands frozen at these levels until 5 April 2030 (end of tax year 2029-30): GOV.UK — IHT nil-rate bands from 6 April 2028.
Residence nil-rate band conditions & taper: GOV.UK — Residence nil-rate band.
Gifts & 7-year taper relief: GOV.UK — Inheritance Tax: gifts.
Data as-of 2026-06-18. This is a planning estimate, not tax advice — confirm your figures with HMRC or a qualified solicitor / financial adviser. Inheritance Tax applies UK-wide (there are no devolved IHT rates).