03/06/2026
You may have heard that a couple can pass on £1 million without inheritance tax.
That can be true.
But it’s not automatic — and it depends on how things are set up.
Here’s how it works in practice:
Each person has a £325,000 nil-rate band.
That can be passed to a spouse and combined — giving £650,000.
There is also an additional £175,000 residence nil-rate band per person —but this only applies if:
• You pass your main home to direct descendants (such as children or grandchildren)
• Your estate is within certain limits (it can reduce for larger estates)
When both allowances apply fully, a couple can potentially pass on up to £1 million free of inheritance tax.
But there are important conditions.
We often see situations where:
• A Will hasn’t been structured to make full use of the allowances
• Assets don’t pass in a way that qualifies for the residence allowance
• Estates exceed the thresholds where allowances begin to taper
• Previous arrangements mean allowances haven’t been preserved
In those cases, the £1 million figure doesn’t apply in the way people expect.
This isn’t about complexity for the sake of it. It’s about making sure that what you believe will happen… actually does.
If you would like clear, transparent and informed advice, we are always here to talk things through — at your pace, with no pressure.
