Inheritance Tax Threshold History

The inheritance tax threshold, formally the nil-rate band, is the value an estate can pass on before any Inheritance Tax is due. It has been £325,000 since 6 April 2009, and gov.uk publishes the full run of earlier figures going back to the £15,000 Capital Transfer Tax threshold of March 1975 (gov.uk, as at July 2026, subject to change).

This is a data piece. It sets out the official history of the threshold, tax year by tax year, alongside the receipts that history has produced. It draws only on named official sources, HMRC and gov.uk publications, each cited at the point of use. It sits alongside our Inheritance Tax Explained guide, our IHT thresholds reference, and our wider estate planning guide. Figures are current as at July 2026 and are subject to change. The tax described applies across the UK; where devolved rules differ they are flagged.

What the inheritance tax threshold is

The threshold is the amount that can pass on death before Inheritance Tax is charged, and its official name is the nil-rate band. It currently stands at £325,000 per person, with a further residence nil-rate band of up to £175,000 where a home passes to direct descendants, giving up to £500,000 per person and up to £1,000,000 for a married couple or civil partners who share unused bands (gov.uk, as at July 2026, subject to change).

The standard rate on the value above the threshold is 40%, reduced to 36% where at least 10% of the net estate passes to charity (gov.uk, as at July 2026, subject to change). The £325,000 nil-rate band, the up to £175,000 residence nil-rate band and the £2,000,000 taper threshold are all fixed at their current levels until the end of the 2030-31 tax year (5 April 2031) (gov.uk, as at July 2026, subject to change).

Key figures at a glance

The threshold's history is a story of steady rises to 2009 and a long pause since. Each row below is a published figure from a named source, with its reference period and a link. The nil-rate band has been fixed at £325,000 for more than fifteen years, having stood at just £15,000 when Capital Transfer Tax began in 1975 (gov.uk, as at July 2026, subject to change).

Measure	Figure	Reference period	Source
First Capital Transfer Tax threshold	£15,000	13 March 1975	gov.uk thresholds
First Inheritance Tax threshold	£71,000	18 March 1986	gov.uk thresholds
Threshold when frozen	£325,000, fixed since 6 April 2009	2009-10 onwards	gov.uk thresholds
Residence nil-rate band (max)	£175,000	2020-21 onwards	gov.uk thresholds
Freeze extended until	End of 2030-31 tax year	Announced 2024-25	gov.uk publication
Annual IHT receipts	£8.5 billion	2025-26	HMRC annual bulletin
Annual IHT receipts (earlier)	£3.5 billion	2006-07	HMRC annual bulletin

All figures as at July 2026 and subject to change. Threshold figures are UK-wide, as are receipts.

From	To	Threshold	Regime
13 Mar 1975	26 Oct 1977	£15,000	Capital Transfer Tax
27 Oct 1977	25 Mar 1980	£25,000	Capital Transfer Tax
26 Mar 1980	8 Mar 1982	£50,000	Capital Transfer Tax
9 Mar 1982	14 Mar 1983	£55,000	Capital Transfer Tax
15 Mar 1983	12 Mar 1984	£60,000	Capital Transfer Tax
13 Mar 1984	5 Apr 1985	£64,000	Capital Transfer Tax
6 Apr 1985	17 Mar 1986	£67,000	Capital Transfer Tax
18 Mar 1986	16 Mar 1987	£71,000	Inheritance Tax
17 Mar 1987	14 Mar 1988	£90,000	Inheritance Tax
15 Mar 1988	5 Apr 1989	£110,000	Inheritance Tax
6 Apr 1989	5 Apr 1990	£118,000	Inheritance Tax
6 Apr 1990	5 Apr 1991	£128,000	Inheritance Tax
6 Apr 1991	9 Mar 1992	£140,000	Inheritance Tax
10 Mar 1992	5 Apr 1995	£150,000	Inheritance Tax
6 Apr 1995	5 Apr 1996	£154,000	Inheritance Tax
6 Apr 1996	5 Apr 1997	£200,000	Inheritance Tax
6 Apr 1997	5 Apr 1998	£215,000	Inheritance Tax
6 Apr 1998	5 Apr 1999	£223,000	Inheritance Tax
6 Apr 1999	5 Apr 2000	£231,000	Inheritance Tax
6 Apr 2000	5 Apr 2001	£234,000	Inheritance Tax
6 Apr 2001	5 Apr 2002	£242,000	Inheritance Tax
6 Apr 2002	5 Apr 2003	£250,000	Inheritance Tax
6 Apr 2003	5 Apr 2004	£255,000	Inheritance Tax
6 Apr 2004	5 Apr 2005	£263,000	Inheritance Tax
6 Apr 2005	5 Apr 2006	£275,000	Inheritance Tax
6 Apr 2006	5 Apr 2007	£285,000	Inheritance Tax
6 Apr 2007	5 Apr 2008	£300,000	Inheritance Tax
6 Apr 2008	5 Apr 2009	£312,000	Inheritance Tax
6 Apr 2009	Frozen to end of 2030-31 (5 April 2031)	£325,000	Inheritance Tax

The residence nil-rate band, a newer layer

A second threshold, the residence nil-rate band, was introduced in 2017 and phased in over four years, adding to the main £325,000 band where a home passes to direct descendants. It began at £100,000 in 2017 to 2018 and rose by £25,000 a year to reach its current £175,000 in 2020 to 2021, where it has since stayed (gov.uk, as at July 2026, subject to change).

Tax year	Residence nil-rate band
2017-18	£100,000
2018-19	£125,000
2019-20	£150,000
2020-21 onwards	£175,000

Residence nil-rate band phase-in per gov.uk, Inheritance Tax thresholds. The band reduces by £1 for every £2 an estate exceeds the £2,000,000 taper threshold (gov.uk). As at July 2026, subject to change. UK-wide.

What the threshold history produced in receipts

A rising then frozen threshold has coincided with rising Inheritance Tax receipts. HMRC reports that receipts grew from £3.5 billion in 2006 to 2007 to £8.5 billion in 2025 to 2026, a period across which the threshold moved to £325,000 and then held there (HMRC, as at July 2026, subject to change).

Receipts against a still threshold. HMRC attributes higher receipts in recent and coming years partly to rises in asset values and to decisions at recent fiscal events to maintain the tax-free thresholds at their 2020 to 2021 levels up to and including 2030 to 2031 (HMRC, as at July 2026, subject to change). Our Inheritance Tax Explained guide sets out how the charge itself is worked out.

What the numbers mean

Read across the decades, the threshold rose broadly in step with prices until 2009, then stopped. The jump from £15,000 in 1975 to £325,000 in 2009 tracks a long era of rising nominal values; the flat line since then means the same £325,000 band now applies to estates that are, on average, worth more than they were (gov.uk, as at July 2026, subject to change). None of this is a change in the 40% rate; it is a change in how far the threshold reaches.

The receipts figures reflect that shift, growing from £3.5 billion in 2006 to 2007 to £8.5 billion in 2025 to 2026 (HMRC, as at July 2026, subject to change). The history also shows the threshold is a policy choice that can move at any fiscal event, up, down or held, so past rises are no guide to future ones. Whether any of this affects a given family depends entirely on their own circumstances, so it can be worth discussing the figures with a qualified professional rather than reading a long trend as a personal outcome.

Scotland, Wales and Northern Ireland

Inheritance Tax is a UK-wide tax, so the £325,000 nil-rate band, the up to £175,000 residence nil-rate band, the 40% rate and the full threshold history above apply the same way in England, Wales, Scotland and Northern Ireland (gov.uk, as at July 2026, subject to change). What differs across the nations is the surrounding law that shapes an estate, such as succession rules and, in Scotland, legal rights of children and spouses, and the process for winding up an estate. The threshold figures are set UK-wide and are not devolved.

Sources and methodology

Every figure on this page comes from a named official source and was checked against that source before publication. No number has been estimated, rounded beyond the source, or extrapolated. Where a source describes a freeze or a forecast, it is described as such. The sources used are listed below with their reference periods.

Full threshold history: gov.uk, Inheritance Tax thresholds and interest rates (£15,000 from 1975 to £325,000 from 2009; residence nil-rate band phase-in). As at July 2026.
Core rates and allowances: gov.uk, Inheritance Tax (£325,000 NRB, up to £175,000 RNRB, 40%/36% rates). As at July 2026.
Residence nil-rate band and taper: gov.uk, residence nil rate band guidance (£175,000 maximum; £2,000,000 taper threshold). As at July 2026.
Current freeze: gov.uk publication (from 6 April 2028) (thresholds fixed to end of 2030-31 (5 April 2031)). As at July 2026.
Annual receipts trend: HMRC tax receipts, annual bulletin (£3.5bn in 2006-07 to £8.5bn in 2025-26).

Frequently asked questions

What is the inheritance tax threshold?

It is the value an estate can pass on before Inheritance Tax is charged, officially the nil-rate band, currently £325,000 per person, plus up to £175,000 of residence nil-rate band where a home passes to direct descendants (gov.uk, as at July 2026, subject to change). Value above the threshold is generally taxed at 40%.

What was the inheritance tax threshold in the past?

gov.uk publishes the full run. The tax-free threshold was £15,000 when Capital Transfer Tax began in March 1975, £71,000 when Inheritance Tax started in March 1986, and has been £325,000 since 6 April 2009 (gov.uk, as at July 2026, subject to change). It generally rose most years until 2009.

When did the threshold last change?

The nil-rate band was last raised on 6 April 2009, to £325,000, and has stayed at that level since (gov.uk, as at July 2026, subject to change). Current policy holds it, and the residence nil-rate band and taper threshold, at their present levels until the end of the 2030-31 tax year (5 April 2031) (gov.uk, as at July 2026, subject to change).

When was the residence nil-rate band introduced?

The residence nil-rate band was introduced in the 2017 to 2018 tax year at £100,000 and phased in by £25,000 a year, reaching its current £175,000 maximum in 2020 to 2021 (gov.uk, as at July 2026, subject to change). It applies where a home passes to direct descendants and reduces for larger estates.

Why has Inheritance Tax raised more while the threshold is frozen?

HMRC reports receipts rose from £3.5 billion in 2006 to 2007 to £8.5 billion in 2025 to 2026, citing rising asset values and the maintained thresholds among the factors (HMRC, as at July 2026, subject to change). A still threshold applied to rising estate values can raise more without any change in the 40% rate.

Is the threshold history the same across the UK?

Yes. Inheritance Tax, and Capital Transfer Tax before it, are UK-wide, so the £325,000 threshold and its full history apply the same way in England, Wales, Scotland and Northern Ireland (gov.uk, as at July 2026, subject to change). Surrounding succession and estate-administration rules can differ between the nations, particularly in Scotland.

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Figures and rules are current as at July 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider your individual circumstances.

Inheritance Tax Threshold History: The Nil-Rate Band Through Time