IHT couple calculator: 2026/27
IHT Couple Calculator 2026/27: How Married Couples Get £1m IHT-Free
Complete guide to inheritance tax for married couples and civil partners in 2026/27. How to combine 2 × £325,000 Nil Rate Band + 2 × £175,000 Residence Nil Rate Band to pass up to £1,000,000 tax-free at second death, transferable NRB / RNRB rules (Sections 8A and 8G IHTA 1984), the £2,000,000 taper trap, 6 worked scenarios showing the IHT bill at different estate sizes, and the April 2027 pension-in-estate change that breaks many existing plans.
Combined couple allowance for 2026/27
Nil Rate Band
£650,000
2 × £325,000 - unconditional, all assets
Residence Nil Rate Band
£350,000
2 × £175,000 - home → direct descendant only
Combined headline allowance
£1,000,000
All four conditions on RNRB must be met for both spouses' allowances at second death
6 worked scenarios
Each row assumes both spouses now deceased (second-death calculation). First-death IHT is zero under Section 18 spousal exemption when everything passes to the surviving spouse.
| Scenario | Estate | NRB | RNRB | Taxable | Rate | IHT |
|---|---|---|---|---|---|---|
| Small estate, family home → children Estate well under combined £1m allowance. | £750,000 | £650,000 | £350,000 | £0 | 40% | £0 |
| Mid estate, family home → children Exactly at combined allowance. | £1,000,000 | £650,000 | £350,000 | £0 | 40% | £0 |
| Above £1m, family home → children £500k taxable at 40%. | £1,500,000 | £650,000 | £350,000 | £500,000 | 40% | £200,000 |
| Wealthy estate, RNRB taper kicks in £200k over £2m taper → £100k of combined RNRB lost. | £2,200,000 | £650,000 | £250,000 | £1,300,000 | 40% | £520,000 |
| Mid estate, no direct descendants (no RNRB) RNRB needs direct descendant beneficiary — combined £350k RNRB lost. | £1,000,000 | £650,000 | £0 | £350,000 | 40% | £140,000 |
| 10% to charity → 36% reduced rate Charity gift ≥ 10% of net estate triggers 36% rate on remainder. | £1,500,000 | £650,000 | £350,000 | £350,000 | 36% | £126,000 |
How the £1m headline works
- First death: deceased leaves entire estate to surviving spouse / civil partner. Section 18 IHTA 1984 spousal exemption applies, so zero IHT. Entire NRB (£325,000) and RNRB (£175,000) remain unused.
- Transfer: unused percentage of NRB and RNRB transfers to the survivor under Sections 8A (TNRB) and 8G (TRNRB) IHTA 1984. The percentage is the figure that locks in - not a cash amount - so a 100% transfer applies to whatever NRB/RNRB is in force at the second death.
- Second death: survivor's estate has access to £325,000 own NRB + £325,000 transferred = £650,000 combined NRB, plus £175,000 own RNRB + £175,000 transferred = £350,000 combined RNRB.
- Claim: executors of the SECOND estate file IHT402 (TNRB) + IHT436 (TRNRB) with the IHT400 within 2 years of the second death. HMRC pays the transferred allowance against the chargeable estate.
- Result: combined £1,000,000 allowance, taxable amount = estate - £1,000,000, IHT = taxable × 40% (or 36% if 10%+ to charity).
The £2,000,000 taper trap
Estates above £2,000,000 lose £1 of RNRB for every £2 above the threshold. The effective marginal IHT rate in the taper band is approximately 60%.
| Combined estate | Combined RNRB available | Total allowance | % of full RNRB |
|---|---|---|---|
| £2,000,000 | £350,000 | £1,000,000 | 100% |
| £2,100,000 | £300,000 | £950,000 | 86% |
| £2,200,000 | £250,000 | £900,000 | 71% |
| £2,350,000 | £175,000 | £825,000 | 50% |
| £2,500,000 | £100,000 | £750,000 | 29% |
| £2,700,000 | £0 | £650,000 | 0% |
April 2027 pension change
From 6 April 2027, most unused Defined Contribution pension funds, SIPPs and SSAS pots enter the deceased's IHT estate (previously sat outside via expression of wish nomination). This is the largest IHT planning change since RNRB introduction in 2017 and breaks many existing couple-wealth plans.
Worked impact for a typical wealthy couple with £400k each in DC pensions plus £900k other estate: pre-April-2027 chargeable estate £900k (pensions outside), under combined £1m allowance, IHT = zero. Post-April-2027 chargeable estate £1.7m, taxable £700k, IHT at 40% = £280k. See our UK IHT rules guide for full April 2027 transition details.
Frequently asked questions
How can a married couple pass £1 million tax-free in inheritance tax?
Married couples and civil partners get two stacked allowances at second death: £325,000 Nil Rate Band each (combined £650,000) plus £175,000 Residence Nil Rate Band each (combined £350,000). Total combined allowance £1,000,000. The mechanism works because of two separate transferability rules. First: Section 18 IHTA 1984 spousal exemption — anything left to a UK-domiciled spouse passes 100% free of IHT, leaving the first spouse's entire NRB and RNRB unused. Second: the unused percentage of the first spouse's NRB and RNRB transfers to the survivor under Section 8A IHTA 1984 (Transferable NRB) and Section 8G IHTA 1984 (Transferable RNRB). The transfer is by percentage of the unused allowance, not by cash amount — so a spouse who died in 2008 leaving everything to the survivor transfers 100% of NRB regardless of the lower NRB in force at that earlier date. To claim TNRB/TRNRB, the executors of the second estate file form IHT402 (NRB) and IHT436 (RNRB) within 2 years of death.
What are the conditions for the £175,000 Residence Nil Rate Band?
Four conditions, all must be met. (1) Residence: the deceased must own or have owned a "qualifying residential interest" in a property they lived in at some point. Investment-only properties never lived in by the deceased do NOT qualify. (2) Direct descendant: the home must pass to a direct descendant - children (including step, foster, adopted), grandchildren and beyond. Nephews, nieces, siblings and unmarried partners do NOT count. Spouses of direct descendants who survive their partner can also qualify. (3) Taper: estates above £2,000,000 lose £1 of RNRB for every £2 above the threshold. Full RNRB withdrawn at £2,350,000 for single, £2,700,000 for transferred-RNRB couple. (4) Cap: RNRB cannot exceed the home's value. Home worth £100k uses £100k of RNRB, not the full £175k. The remaining £75k IS still transferable to spouse for use against their home at second death.
What happens if my estate is over £2 million? The "RNRB taper trap"
Estates above £2,000,000 lose £1 of RNRB for every £2 above the threshold (Section 8D(5) IHTA 1984). This creates a punitive effective rate band. Worked example for a couple with combined £350k RNRB: estate £2.0m = full £350k available; estate £2.2m = £350k - (£200k × 0.5) = £250k; estate £2.35m = £350k - £175k = £175k; estate £2.5m = £350k - £250k = £100k; estate £2.7m = £350k - £350k = ZERO RNRB. The marginal IHT rate in the taper band is effectively 60% (40% on the taxable amount + 20% on the lost RNRB). This is the IHT equivalent of the £100k-£125,140 personal-allowance taper. Mitigation strategies: lifetime gifting outside the 7-year window to bring estate below £2m, charity giving (each £1 to charity reduces estate by £1 from the £2m calculation), business / agricultural property which qualifies for BPR / APR (still counts for taper from April 2026 unless restructured), pension cash-out before death (until April 2027 pensions sit outside the estate).
Worked example - couple, £1.5m estate, family home to children
Combined estate £1,500,000. Both spouses now deceased. Step 1: spousal exemption on first death applies, transferring entire allowance to survivor. Step 2: combined NRB £650,000 + combined RNRB £350,000 = £1,000,000 total allowance. Step 3: estate of £1,500,000 is BELOW the £2,000,000 taper threshold, so full RNRB available. Step 4: taxable amount = £1,500,000 - £1,000,000 = £500,000. Step 5: IHT at 40% on £500,000 = £200,000. The executors file IHT402 + IHT436 within 2 years of the second death to claim the transferred allowances. The £200,000 tax bill is due within 6 months from the end of the month of death; HMRC will accept a payment plan if the estate's main asset is the family home.
Does it matter when the first spouse died?
For NRB and RNRB transfer purposes - mostly no, but RNRB is more restrictive. TNRB: applies regardless of date of first death (Schedule 1A of IHTA 1984 introduced TNRB in October 2007 retroactively). A widow whose husband died in 1980 leaving everything to her can still claim 100% of TNRB at her own death today. Use IHT402. TRNRB: only available if the second death is on or after 6 April 2017 (when RNRB was introduced). First death date does NOT need to be after April 2017 - even if the first spouse died in 2010, the survivor still gets 100% of TRNRB when they die today, because the "unused percentage" is computed against the RNRB in force at the second death date. Use IHT436. Both forms must be filed within 2 years of the second death; HMRC has discretion to extend but rarely does so.
What if we are not married but living together?
Cohabiting unmarried couples get ZERO of the spousal benefits. No spousal exemption on first death — the first death triggers immediate IHT if estate exceeds individual allowance £500,000 (RNRB conditions permitting). No transferable NRB or RNRB. Each partner pays IHT individually on their own estate. This is the "common law marriage" myth - there is no such legal status in England, Wales or Scotland regardless of how long you've cohabited. The single largest financial protection of marriage / civil partnership in UK law is the IHT spousal exemption. Worked comparison for two £600k estates: married couple = £0 IHT (combined £1m allowance covers £1.2m total but each individual estate is under their own £500k allowance even without transfer); unmarried = each partner pays IHT on excess over their individual £500,000 allowance, total IHT = £40k. To get the spousal exemption you must be legally married or in a civil partnership at the time of death — quick deathbed marriages have been allowed by registrars and tested in court (subject to capacity questions).
Pensions and IHT from April 2027
From 6 April 2027, most unused pension funds will be included in the deceased's estate for IHT purposes, abolishing the long-standing IHT exemption (Budget October 2024 announcement, confirmed Spring Budget 2025). Defined Contribution pensions, SIPPs and SSAS pots that previously passed outside the estate via expression of wish nomination will from 2027 form part of the chargeable estate, subject to NRB and RNRB. Tax-free portions (25% PCLS) drawn before death remain in the estate already (general cash). Defined Benefit pensions with dependents' pensions paid as ongoing income remain outside the estate. Annuities purchased lifetime remain outside. Charitable bequests of pension remain exempt. Worked impact for a typical wealthy couple with £400k each in DC pensions plus £900k other estate: under current rules combined chargeable estate is £900k (pensions outside), well within £1m allowance, IHT zero. From April 2027 chargeable estate becomes £1.7m, taxable above £1m = £700k, IHT at 40% = £280k. Pre-April-2027 strategies include: drawing down pension faster and gifting outside 7-year window, using PCLS to fund 7-year-rule whole-life insurance trust outside the estate, or single-premium investment bonds where appropriate.
What is the difference between Nil Rate Band and Residence Nil Rate Band?
Nil Rate Band £325,000: applies to ALL types of estate assets - cash, investments, businesses, second homes, art, foreign property, anything. No conditions. Section 7 + Schedule 1 of IHTA 1984 (Inheritance Tax Act 1984). NRB has been £325,000 since April 2009 (a 17-year freeze by April 2026) and is confirmed frozen through April 2030. Residence Nil Rate Band £175,000: applies ONLY to a residential property passed to direct descendants. Introduced from April 2017 by Section 9 of Finance (No. 2) Act 2015 - relatively new. RNRB is conditional (requires home + direct descendant + estate under £2m taper threshold) where NRB is unconditional. Both are individual allowances that transfer to a surviving spouse / civil partner under Sections 8A and 8G IHTA 1984. The combined headline figure of £1m for a couple comes from (£325k + £175k) × 2 - which only works in full if all four conditions on RNRB are met for BOTH spouses' allowances at the second death.
What if our home is worth less than £175,000 each?
RNRB is capped at the home's value (Section 8D(5)(b) IHTA 1984). A home worth £200,000 left to children gives £175,000 RNRB used + £25,000 of allowance "wasted" against a £200k home. A home worth £100,000 gives only £100,000 of RNRB used; the remaining £75,000 is NOT lost - it transfers to the surviving spouse as TRNRB (residual percentage). When the survivor dies, their own £175k RNRB applies against their (potentially different) home plus the transferred £75k applies against any qualifying residential interest they hold. The "downsizing addition" rule (Section 8FB-8FC IHTA 1984) preserves RNRB for estates that downsized after 8 July 2015 - a deceased who downsized from a £400k home to a £150k flat and left the flat to children still gets RNRB up to the OLDER home's value × the relevant percentage. This is one of the most under-claimed parts of the IHT system; executors should check downsizing history when filing IHT400.
How does the 36% charity reduced rate interact with the couple allowance?
If 10% or more of the "net qualifying estate" (estate after NRB but before charity gift) is left to charity, the rate of IHT on the REMAINING taxable amount drops from 40% to 36% (Section 4 + Schedule 1A IHTA 1984). The 10% test is on the chargeable estate AFTER nil rate band, not the gross estate. Worked example: couple, combined estate £1.5m, full £1m allowance, taxable £500k. Without charity: IHT = £500k × 40% = £200k, family receives £1.5m - £200k = £1.3m. With 10% charity (£50k to charity): chargeable estate £450k after charity, charity is 10% of (£500k taxable) so reduced rate applies on £450k × 36% = £162k. Family + charity total receive £1.5m - £162k = £1.338m, of which £50k goes to charity, £1.288m to family. So a £50k charity gift "costs" the family only £12k net (£1.3m - £1.288m), with £38k going to charity from what would have been HMRC's share. This is the most tax-efficient way to make a substantial charitable bequest under UK law.
How do we plan to maximise the couple allowance?
Five practical steps. (1) Wills: ensure each will leaves everything to spouse / civil partner to bank the 100% spousal exemption and maximise transferable allowance. Consider "right to occupy" trust over the home if children from previous relationships need protection. (2) Title: hold home as "tenants in common" not "joint tenants" if using a nil-rate-band discretionary trust strategy (less common now TRNRB exists, but still useful for some). (3) Records: keep first spouse's IHT400 / IHT421 (clearance certificate) and probate forms for 12+ years - executors need them to claim transferred allowances. (4) Estate sizing: if combined estate is approaching the £2m RNRB taper, consider lifetime gifting to drop below £2m (7-year potentially exempt transfer rule). Charity bequests also reduce the £2m calculation £-for-£. (5) Pension awareness: from April 2027 pensions enter the IHT estate - urgent for couples whose estate becomes taxable when pension assets are added. See our inheritance tax calculator for live numbers, IHT gift taper calculator for 7-year-rule gifts, and RNRB calculator for full residence-band details.
When do we need to file the IHT return and pay the tax?
For "excepted estates" where no IHT is due (estate fully covered by allowances or spousal exemption), the executors file the streamlined IHT205 / IHT207 (Scotland) or simply declare on probate application. The full IHT400 return is required for estates where IHT is due, where the gross estate exceeds £3 million, where the deceased had gifted £150k+ in the 7 years before death, where foreign assets exceed £100k, or other complex circumstances. The IHT400 is due within 12 months from the end of the month of death; for transferable NRB and RNRB claims, executors file IHT402 and IHT436 alongside. IHT payment itself is due within 6 months from the end of the month of death — interest accrues from then at the prescribed rate (currently 7.75% from August 2024). HMRC offers instalment payment for tax on land and buildings (10 annual payments) plus business and agricultural assets. Probate cannot be granted until at least the initial IHT has been paid (or instalment arrangement agreed), which creates the "IHT cash flow" problem — many executors take out probate loans or use direct payment from the deceased's bank.
Related IHT tools and guides
- Inheritance Tax calculator - interactive IHT calc for any estate.
- IHT gift taper calculator - 7-year rule and taper on lifetime gifts.
- RNRB calculator - residence nil rate band detail including downsizing.
- UK Inheritance Tax rules guide - NRB, RNRB, BPR/APR cap, pension IHT 2027.
- BPR & APR April 2026 changes - £1m cap on 100% relief.
- Marriage Allowance guide - related transferable allowance (income tax).
- Family Investment Companies - alphabet shares, gift vs loan IHT planning.
- UK trust tax - RPT periodic charges, discretionary trust planning.