UK Inheritance Tax Scenarios

Real-world inheritance tax scenarios showing how IHT is calculated for different estate types and situations. Use these examples to understand your own potential liability.

Common IHT Scenarios

• Single person estate (£800,000) — Widow leaving estate to adult children; RNRB applies, estimated IHT: £70,000
• Married couple estate (£1,200,000) — Combined allowances of £1,000,000; IHT on second death: £80,000
• Family home inheritance (£950,000) — £500,000 home left to children; RNRB reduces IHT liability significantly
• Business owner estate — Business Property Relief can provide up to 100% relief on qualifying business assets
• High-value estate (£2,000,000+) — RNRB taper threshold applies; requires specialist estate planning

Key Planning Opportunities

• Maximising nil rate band and RNRB allowances
• Transferring unused allowances between spouses
• Strategic gifting to reduce the taxable estate over time
• Charitable donations to reduce the IHT rate to 36%