calculatetax.co.uk
Tax year: 2025/26 & 2026/27 Jurisdiction: UK Last verified: May 9 2026

Inheritance Tax Calculator

Estimate UK Inheritance Tax for a straightforward estate. This tool applies the nil-rate band, residence nil-rate band, transferable spouse or civil partner allowance, charity gifts and lifetime gifts made within seven years.

Estimate the IHT position

Use current estate values. Keep complex trusts, business relief and agricultural relief out of this quick estimate.

Estate value

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Exempt legacies and home allowance

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£

Spouse/civil partner and charity gifts are usually exempt. The charity figure can also help check whether the reduced 36% IHT rate may be relevant.

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Transferred allowances

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%

Enter 100% if the first spouse or civil partner used none of that allowance. Executors normally claim the transferable percentage, not a fixed cash amount.

Gifts made within 7 years

Enter gifts after deducting any annual, small-gift, wedding or normal-expenditure exemptions you are confident apply.

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yrs
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yrs
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Before you trust the number

Inheritance Tax looks simple from a distance: add up the estate, deduct the tax-free bands, then charge 40% on the balance. Real estates are rarely that neat. A London home, a pension pot, a few lifetime gifts, a will leaving something to charity, and the question of whether a late spouse used their allowance can all change the result.

Use this as a practical first estimate before speaking to a solicitor, executor, accountant or financial planner. Start with assets owned at death, deduct debts and funeral costs, then enter spouse/civil partner and charity legacies separately because those gifts are normally exempt.

When the home allowance applies

If a home is being left to children, stepchildren, adopted children, foster children or grandchildren, enter the value of the qualifying home so the residence nil-rate band can be tested. If the home is going to someone else, or there is no qualifying residential interest, leave that field at zero.

The residence band is capped by the qualifying home value and tapers for estates over GBP 2 million. For larger estates, that taper can remove the allowance entirely, even where the family home itself is being left to direct descendants.

Key IHT rules to check

Nil-rate band order

The GBP 325,000 nil-rate band can be used by lifetime gifts within seven years before it shelters the death estate.

Transferable allowances

A surviving spouse or civil partner may claim unused allowance percentages from the first estate, often changing the result dramatically.

Residence band cap and taper

The residence nil-rate band can add up to GBP 175,000, but it needs a qualifying home and is tapered above GBP 2 million.

Charity rate check

A large enough charity legacy may qualify the estate for the 36% rate, but the official 10% test depends on the estate components.

Gifts and the 7-year rule

Gifts made more than seven years before death are usually outside the IHT calculation. Gifts within seven years can be pulled back in. The annual exemption, small gift allowance, wedding gift allowance, gifts from normal expenditure out of income and gifts to a spouse, civil partner or charity can all matter, so the gift boxes ask for the value after exemptions you are confident about.

Taper relief is often misunderstood. It does not reduce the value of the gift. It reduces the tax rate on the gift, and only where the total gifts have already exceeded the available nil-rate band. The calculator sorts gifts from oldest to newest because earlier gifts normally use the nil-rate band first.

Worked example: home left to children

Suppose someone dies with a GBP 900,000 estate, GBP 20,000 of debts and funeral costs, and a GBP 450,000 home left to their adult children. No unused spouse allowances are available and no lifetime gifts have been made.

The net estate is GBP 880,000. The nil-rate band is GBP 325,000 and the residence nil-rate band is GBP 175,000, so total allowances are GBP 500,000. The taxable estate is GBP 380,000 and the IHT estimate is GBP 152,000 at 40%.

If the same person had inherited 100% of a late spouse's unused nil-rate band and residence nil-rate band, the available allowances could rise to GBP 1 million, subject to the home value and taper rules.

Complex estate warnings

What this calculator does not cover

It does not decide whether Business Relief or Agricultural Relief applies. It does not calculate IHT on trusts, gifts with reservation of benefit, pre-owned asset tax, non-UK domicile and residence issues, excluded property, life policies written in trust, deed-of-variation planning or complex will components.

It also does not value assets for probate. If inherited assets are later sold, the beneficiary may need the Capital Gains Tax calculator.

Pension change from 6 April 2027

The government has announced that most unused pension funds and pension death benefits will come within the value of a person's estate for IHT purposes from 6 April 2027. Death-in-service benefits payable from a registered pension scheme are expected to remain outside the change.

If inherited property is rented out, the Landlord Tax calculator and Rental Yield calculator may be more useful after the estate has been settled.

Inheritance Tax FAQs

Is IHT charged on the whole estate?
No. IHT is normally charged only on the part above the available thresholds after exemptions and reliefs. The standard rate is 40%, but a reduced 36% rate may apply to some estates where enough is left to charity.
Can a married couple pass on GBP 1 million tax-free?
Sometimes. A couple may be able to combine two nil-rate bands and two residence nil-rate bands, giving up to GBP 1 million. But the residence part needs a qualifying home left to direct descendants and can be tapered for estates over GBP 2 million.
Do beneficiaries pay the IHT personally?
IHT is normally paid from the estate by the personal representatives. Recipients of large lifetime gifts can become liable in some cases, especially once gifts in the seven years before death exceed the nil-rate band.
Should I include gifts made every Christmas or birthday?
Small gifts, annual exemptions and gifts made from normal income may be exempt, but the conditions matter. Keep records of dates, amounts, recipients and the exemption you think applies. Executors need that trail later.

How this IHT calculator works

Inputs used

  • Estate assets, debts and funeral costs.
  • Spouse or civil partner exempt legacy and charity legacy.
  • Qualifying home value left to direct descendants.
  • Unused nil-rate band and residence nil-rate band percentages from a spouse or civil partner.
  • Lifetime gifts made within seven years, entered after any exemptions the user has already deducted.

Calculation method

  • Calculate the net estate before exemptions and use this to test the residence nil-rate band taper over GBP 2 million.
  • Build the available nil-rate band from GBP 325,000 plus the transferable percentage, capped at two full nil-rate bands.
  • Build the residence nil-rate band from GBP 175,000 plus the transferable percentage, then cap it by the qualifying home value and reduce it for taper.
  • Apply the nil-rate band to gifts within seven years from oldest to newest, then apply any remaining nil-rate band to the death estate.
  • Deduct spouse/civil partner and charity exempt legacies before calculating estate tax at the selected 40% or 36% rate.

Assumptions

  • The estate is UK IHT-scope and the user has entered asset values before probate valuation adjustments.
  • Gift values are entered after annual exemptions and other gift exemptions that the user is confident apply.
  • The 36% charity-rate option is selected only where the estate qualifies under the official reduced-rate rules.
  • For deaths on or after 6 April 2027, affected unused pension funds may need to be included in the estate asset figure.

What this does not cover

  • Does not calculate trusts, gifts with reservation, pre-owned asset tax, non-UK domicile issues or excluded property.
  • Does not calculate Business Relief or Agricultural Relief; use professional advice for trading businesses, farms, AIM shares or partnership interests.
  • Does not value assets for probate or replace the official HMRC IHT forms.
  • Does not calculate later taxes on inherited assets; use the Capital Gains Tax calculator if an inherited asset is later sold.

Official sources

Last verified: May 9 2026. Calculations are estimates based on the published rules and assumptions shown on this page.

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