Key figures
- The nil-rate band is 325 000 pounds per person and has been frozen since 2009; the freeze now runs to 5 April 2031.
- The residence nil-rate band adds up to 175 000 pounds where the home passes to direct descendants, and is lost at 1 pound for every 2 pounds of estate above 2 000 000.
- Above the bands, the rate is 40 per cent, or 36 per cent where at least a tenth of the baseline amount goes to charity.
- Since 6 April 2025, a person UK resident in at least 10 of the previous 20 tax years is taxed on worldwide assets, under IHTA 1984 s.6A. Domicile no longer matters for this.
- After leaving, worldwide exposure lasts from 3 to 10 tax years, depending on the years of residence.
- The spouse exemption is capped at 325 000 pounds where the deceased is a long-term resident and the surviving spouse is not, under s.18(2).
- There is no UK inheritance tax convention with the United Arab Emirates.
UK inheritance tax simulator
An estimate for a death in the 2026-27 tax year, under the residence based regime in force since 6 April 2025.
Points to note
- Long-term UK resident under s.6A: the worldwide estate is within the charge, subject to any convention.
- Business and agricultural property relief, lifetime gifts, trusts and pensions are not modelled.
Nothing you enter is stored, sent or logged. The whole calculation runs in your browser.
From domicile to residence
For a century and a half, UK inheritance tax turned on domicile, a common law concept that followed people for life. Finance Act 2025 abolished it for this tax. Since 6 April 2025, UK assets are always within the charge, and assets abroad are within it where the deceased was a long-term UK resident: resident in at least ten of the twenty tax years before the year of death.
Residence is judged year by year under the statutory residence test used for income tax. Below the age of twenty, the test is at least half of the tax years since birth.
The tail after leaving
Leaving the United Kingdom does not end the exposure. The long-term resident status is shed only after a run of consecutive years abroad, which grows with the years spent in the country.
- Ten to thirteen years of residence in the twenty year window: three years abroad.
- Fourteen years: four. Fifteen: five. And so on, one more for each additional year.
- Twenty years of residence: ten years abroad before the worldwide estate leaves the charge.
How the estate is taxed
The tax falls on the estate as a whole, not on each heir's share. The relationship of the heir does not change the rate. It only opens the spouse exemption, and the residence nil-rate band where the home goes to children or grandchildren.
The residence nil-rate band is tapered on the value of the whole estate, not on the taxable part. An estate of 2 350 000 pounds or more loses it entirely, even when most of it passes to a spouse free of tax. Unused bands on a first death pass to the surviving spouse as a percentage, so a couple can shelter up to 1 000 000 pounds.
Four conventions, four different answers
Take the same person: twelve years resident in the United Kingdom, now living abroad, dying with assets outside the country. The United Kingdom taxes those assets under its own law. Whether a convention stops it depends entirely on where that person now lives.
- United Arab Emirates: no convention. The United Kingdom taxes the worldwide estate for the whole tail, and the credit for foreign tax is of no use, since Dubai levies none.
- Switzerland: the 1994 convention generally protects assets outside the United Kingdom, except that the United Kingdom keeps a secondary right over a UK national who is not also Swiss.
- United States: the 1979 convention protects them in the same way, except for a UK national.
- France: the 1963 convention predates 1975 and is untouched by the long-term residence rule. What decides is common law domicile. A Briton who has lived in Paris for twenty years may still be taxed if he never abandoned his domicile of origin.
What this calculator does not cover
Business and agricultural property relief, whose 100 per cent allowance is 2 500 000 pounds from 6 April 2026; gifts in the seven years before death and their taper; trusts; and pension funds, which are due to enter the estate from April 2027. The transitional rules for people who were not UK resident in 2025-26 and not UK domiciled on 30 October 2024 turn on the former domicile tests and are flagged rather than applied.
| Item | 2026-27 |
|---|---|
| Nil-rate band | 325,000 GBP |
| Residence nil-rate band | 175,000 GBP |
| Taper threshold | 2,000,000 GBP |
| Rate above the bands | 40 % |
| Rate with 10 per cent to charity | 36 % |
| Spouse exemption cap, LTR to non-LTR | 325,000 GBP |
| APR and BPR at 100 per cent | 2,500,000 GBP |
IHTA 1984 ss.7, 8D, 18(2), 124D, Sch.1A; FA 2021 s.86 as amended by FA 2026 s.72
| Years resident in the 20 before leaving | Years abroad to leave the charge |
|---|---|
| 10 to 13 | 3 |
| 14 | 4 |
| 15 | 5 |
| 16 | 6 |
| 17 | 7 |
| 18 | 8 |
| 19 | 9 |
| 20 | 10 |
IHTA 1984 s.6A(3)
Questions
› Do non-residents pay UK inheritance tax?
Always on assets situated in the United Kingdom. On assets abroad, only where they were long-term UK residents: resident in at least 10 of the 20 tax years before death, a status that survives departure for 3 to 10 years.
› I left the UK and live in Dubai. Am I still exposed?
Yes, for the length of the tail if you were a long-term resident, and there is no UK convention with the United Arab Emirates to limit it. UK assets remain taxable indefinitely.
› What is the inheritance tax threshold in 2026?
325 000 pounds per person, plus up to 175 000 pounds where the home goes to direct descendants. Both are frozen until 5 April 2031.
› Can I leave everything to my spouse tax free?
Yes, where both of you are long-term UK residents. Where the deceased is and the spouse is not, the exemption is capped at 325 000 pounds under s.18(2), unless the spouse elects to be treated as a long-term resident.
› Does the France convention protect me if I live in Paris?
Only if your common law domicile is French. The 1963 convention ignores the long-term residence rule. Residence in France alone is not the test.
› Is the domicile of origin still relevant?
Not for the scope of the tax in UK law since 6 April 2025. It remains decisive under the France convention of 1963, which the reform left untouched.
Sources
Primary sources only: the Inheritance Tax Act 1984 as amended, the conventions as published on legislation.gov.uk, and HMRC guidance. Every figure was checked against an official worked example where one exists.
Statute
- IHTA 1984 s.6A, long-term UK resident
- IHTA 1984 s.6B, rule below the age of twenty
- IHTA 1984 s.8D, residence nil-rate band and taper threshold
- IHTA 1984 s.8E, residence nil-rate amount
- IHTA 1984 s.18, spouse exemption
- IHTA 1984 s.124D, APR and BPR allowance
- IHTA 1984 s.159, unilateral relief for foreign tax
- IHTA 1984 s.267ZF, long-term residence and conventions
- IHTA 1984 Schedule 1A, 36 per cent rate
Conventions
This page is educational and does not constitute legal or tax advice. Nothing you enter is stored, transmitted or logged; the whole calculation runs in your browser. Amounts are in pounds sterling, with no currency conversion.