Inheritance Tax Explained: Will Your Family Actually Have to Pay It?
Inheritance Tax sounds scary, but most families never pay a penny. Here's a plain-English look at the thresholds, allowances and the residence nil-rate band — and how good Will planning keeps more of your estate with your family.
Inheritance Tax (IHT) is one of those subjects that causes more worry than it should. The name alone makes families across Oldham, Rochdale and Tameside fear the taxman will take a chunk of everything they've worked for. The reality is far more reassuring: the vast majority of estates pay no Inheritance Tax at all. Here's a clear, jargon-free explanation of how it really works in 2026.
What is Inheritance Tax?
Inheritance Tax is a tax on the estate (property, money and possessions) of someone who has died. It's only payable if the value of your estate is above a set threshold — and thanks to several allowances, that threshold is much higher than most people realise.
The thresholds and allowances
- Nil-Rate Band — everyone gets a tax-free allowance of £325,000. Anything below this is charged at 0%.
- Residence Nil-Rate Band — an extra allowance (currently £175,000) when you pass your main home to direct descendants such as children or grandchildren.
- That means a couple passing a family home to their children can leave up to £1,000,000 completely tax-free.
- Anything above the allowances is taxed at 40%.
"For most families in Greater Manchester, the family home and savings fall well below the £1 million combined allowance — so no Inheritance Tax is due at all."
Spouses and civil partners
Transfers between married couples and civil partners are completely exempt from Inheritance Tax. What's more, any unused allowance can be passed on to the surviving partner — so a couple can combine their allowances when the second partner passes away.
How good planning helps
Even where an estate is above the thresholds, sensible planning written into your Will can reduce or eliminate the tax bill. This might include making use of gift allowances, leaving part of your estate to charity (which reduces the rate from 40% to 36%), or setting up a Protective Property Trust. We'll talk through your situation honestly at your kitchen table — and only suggest something if it genuinely helps your family.
Want to know where you stand?
If you'd like a clear picture of whether Inheritance Tax applies to your estate, book a free home visit. We'll explain it in plain English, with no obligation and no jargon — just friendly local advice.
Sources & further reading
We believe in honest, well-sourced advice. These independent, official resources offer more detail on the topics covered above.
- Gov.uk — Inheritance TaxOfficial guidance on thresholds, allowances and when IHT is payable.
- Gov.uk — Leave your home to your children (residence nil-rate band)How the extra residence nil-rate band works.
- MoneyHelper — Inheritance TaxImpartial, plain-English guidance from the government-backed money service.
- HMRC — Inheritance Tax manualThe detailed official reference for IHT rules and reliefs.
Talk it through with a friendly local expert
Reading is a great start — but a quick chat can answer everything specific to your family. Free home visits across Oldham, Rochdale & Tameside.