Inheritance tax threshold in Scotland explained

The inheritance tax threshold in Scotland is £325,000 per person, exactly the same as in England, Wales and Northern Ireland. Inheritance tax (IHT) is a reserved tax, meaning only the UK Parliament can set it, so the nil-rate band, the residence nil-rate band and the 40% rate all apply in Scotland without any variation. If your estate is worth less than £325,000, or you leave everything above that to a spouse, civil partner or charity, there is normally no IHT to pay, whether you live in Aberdeen or Aberystwyth.

That does not mean estate planning in Scotland is the same as elsewhere, because almost everything around the tax is different: Scotland uses confirmation rather than probate, Scots law gives spouses and children legal rights that cannot be written out of a will, and the intestacy rules bear little resemblance to those south of the border. This guide covers the UK-wide threshold briefly, then focuses on the Scottish differences that actually change outcomes. To see where your own estate sits against the threshold, our free IHT threshold calculator does the arithmetic for you.

Why the threshold is the same across the UK

Under the devolution settlement, inheritance tax is reserved to Westminster. The Scottish Parliament sets Scottish income tax rates and bands, which is why a Scottish payslip can look different from an English one, but it has no power over IHT, capital gains tax or National Insurance. HMRC administers inheritance tax on the same rules for every part of the UK, as set out in the official guidance on inheritance tax at GOV.UK.

So the headline numbers for a Scottish estate are:

Allowance or rate	Amount	Notes
Nil-rate band	£325,000	Per person, frozen until 5 April 2031
Residence nil-rate band	Up to £175,000	Home passing to children or grandchildren; stepchildren and adopted children count
RNRB taper	£1 lost per £2 over £2,000,000	Fully lost at £2.35m (single) or £2.7m (couple)
Combined couple threshold	Up to £1,000,000	Married couples and civil partners, with unused allowances transferable
Standard IHT rate	40%	On the value above the available threshold
Reduced charity rate	36%	Where 10% or more of the net estate goes to charity

Gifts follow the same UK-wide rules too: a £3,000 annual exemption, £250 small gifts, wedding gifts of £5,000 to a child, £2,500 to a grandchild or £1,000 to anyone else, and taper relief on larger gifts made 3 to 7 years before death. This article deliberately keeps the threshold mechanics short, because our guide to the UK inheritance tax threshold covers them in full depth, and the transferable allowance rules for couples are explained in our guide to the threshold for married couples and the RNRB.

One forthcoming change also applies UK-wide: from 6 April 2027, unused pension funds and death benefits enter the estate for IHT, with personal representatives liable (death in service benefits are excluded). HMRC estimates 10,500 estates will become newly liable each year and 38,500 will pay more, averaging around £34,000 extra. Scottish pension holders are affected on identical terms; you can gauge your exposure with the pensions IHT 2027 estimator.

Farms and family businesses: relief changes that matter in Scotland

Agricultural relief and business relief also apply UK-wide, but they deserve a mention here because Scotland has a high concentration of family farms, crofts and estates that rely on them. From 6 April 2026, 100% relief is limited to the first £2.5 million of combined agricultural and business property per person, with relief at 50% above that (the widely reported £1 million cap was the original announcement, raised to £2.5 million before the rules took effect), as set out in HMRC's guidance on the agricultural property relief and business property relief reforms at GOV.UK. For a Scottish farming family, that £2.5 million allowance sits alongside the £325,000 nil-rate band and, where the farmhouse passes to children, the residence nil-rate band. Valuing the land, working out which assets qualify and sequencing lifetime transfers is specialist work, and it interacts with the legal rights rules below because farm moveables (stock, machinery, cash) count towards the moveable estate.

Confirmation, not probate

Here the Scottish system parts company with the rest of the UK. In Scotland, the legal authority to administer a deceased person's estate is called confirmation, granted by the sheriff court, not a grant of probate from HMCTS. The process is explained on mygov.scot and in detail by the Scottish Courts and Tribunals Service.

The key features:

• Executor-nominate or executor-dative. An executor named in the will is an executor-nominate. If there is no will, or no executor able to act, the court appoints an executor-dative, usually the surviving spouse, civil partner or a close relative. An executor-dative usually also needs a bond of caution (an insurance policy guaranteeing proper administration, pronounced "kay-shun"), which executors-nominate do not.
• The C1 inventory. The application centres on form C1, a full inventory of everything in the estate. It is a dual-purpose form used by both the court and HMRC, covering the grant of confirmation and the assessment of inheritance tax in one document.
• Small estates. Where the gross estate is £36,000 or less, a simplified small estate procedure applies and sheriff clerks can help applicants prepare the paperwork. Above £36,000 the estate is a large estate and the court service is prohibited from assisting, so most executors of larger estates take professional help.
• Fees. Scottish confirmation fees are set separately by the Scottish Courts and Tribunals Service and are banded by estate value, so the £526 probate application fee charged in England and Wales does not apply. Check the current commissary fees on the Scottish Courts website before applying.

The inheritance tax itself is still paid to HMRC on the UK-wide rules described above. Confirmation changes the paperwork and the court, not the tax. For the general principles of estate administration, see our probate hub, which flags Scottish differences where they arise.

Legal rights: why you cannot fully disinherit a spouse or children in Scotland

Scots law contains a protection with no equivalent in England and Wales. A surviving spouse or civil partner, and all children (including adult children), have legal rights over the deceased's net moveable estate: broadly money, investments, vehicles and personal possessions, but not land or buildings. These rights exist automatically and apply even where a will says otherwise. The framework comes from the Succession (Scotland) Act 1964 and older common law.

The shares are fixed:

• The spouse or civil partner can claim one third of the net moveable estate if the deceased left children, or one half if there are none.
• The children together share one third of the net moveable estate if there is a surviving spouse or civil partner, or one half if there is not.

A person entitled to legal rights must choose between them and whatever the will leaves them; they cannot take both. For inheritance tax, a legal rights claim can change who inherits what, and therefore how much of the estate is covered by the spouse exemption, so Scottish estate planning has to account for claims that simply cannot arise in England and Wales. Blended families feel this most sharply, and our guide for blended families looks at the planning side.

Scottish intestacy: prior rights, not the £322,000 statutory legacy

If someone dies without a will in England and Wales, the surviving spouse or civil partner receives a statutory legacy of £322,000 plus half of anything above it, with children taking the other half. Scotland does not use this system at all. Scottish intestacy instead works through three layers, in strict order:

1. Prior rights. The surviving spouse or civil partner first takes the family home up to a value of £473,000, furniture and furnishings up to £29,000, and a cash sum of £50,000 if the deceased left children or other descendants, or £89,000 if not. These figures have applied since February 2012.
2. Legal rights. The legal rights shares described above are then settled out of what remains of the moveable estate.
3. The free estate. Anything left passes to relatives in a fixed statutory order: children first, then parents and siblings, and so on.

For many ordinary Scottish estates, prior rights mean the surviving spouse or civil partner takes everything, but where the home is worth more than £473,000, or there are children from an earlier relationship, the outcome can be very different from what the family expects. The intestacy layers also interact with the IHT spouse exemption: amounts passing to the spouse are exempt, while amounts passing to children use up the £325,000 nil-rate band.

Marriage does not revoke a will in Scotland

One final trap for anyone who has moved between the two systems. In England and Wales, getting married or entering a civil partnership automatically revokes an existing will unless it was made in contemplation of that marriage. In Scotland it does not: your pre-marriage will remains fully valid. Divorce or dissolution, on the other hand, is dealt with by the Succession (Scotland) Act 2016, which generally treats the former spouse or civil partner as having failed to survive you, so gifts to them and their appointment as executor fall away while the rest of the will stands.

The practical rule is the same on both sides of the border: review your will after every marriage, divorce, birth or major purchase, because the default rules that fill the gaps are different in each jurisdiction and rarely match what people intend.

Checking a Scottish estate against the threshold: five steps

1. Value everything at date of death. Property, bank accounts, investments, vehicles, possessions and, from 6 April 2027, unused pension funds. HMRC's guidance on valuing the estate of someone who died applies in Scotland.
2. Deduct debts and liabilities. Mortgages, loans, credit cards and funeral costs come off before the threshold is applied.
3. Add back relevant gifts. Gifts made in the 7 years before death above the exemptions are counted, with taper relief between 3 and 7 years.
4. Apply the available allowances. £325,000 nil-rate band, up to £175,000 residence nil-rate band if the home passes to direct descendants, plus any unused allowances transferred from a late spouse or civil partner.
5. Apply exemptions. Everything passing to a spouse, civil partner or charity is exempt, and a charity share of 10% or more of the net estate cuts the rate on the rest from 40% to 36%.

If the result is above the available threshold, tax is due at 40% on the excess and the C1 confirmation paperwork will need the full HMRC reporting rather than the simpler excepted estate route.

Speak to a specialist

Scottish estates sit at the junction of UK-wide tax law and distinctively Scottish succession law, and the interaction of legal rights, prior rights and the IHT exemptions is where costly mistakes happen. This guide is general information, not legal or tax advice. If your estate is anywhere near the threshold, or your family situation involves a second marriage, children from an earlier relationship or property outside Scotland, we can connect you with a vetted specialist who focuses on Scottish estates. Start by running your figures through the free IHT threshold calculator so you know exactly where you stand before that conversation.