Updated to 6 April 2026 IHT rules
UK Inheritance Tax (IHT) Calculator
Estimate the Inheritance Tax on your estate, including the residence nil-rate band, the £2 million taper, transferable allowances for widows and widowers, and the reduced 36% charity rate.
- Left to beneficiaries (85.0%)
- Inheritance Tax (15.0%)
- Left to charity (0.0%)
Inheritance Tax takes about 15.0% of your net estate.
The residence nil-rate band has been reduced by £0 because the net estate is above £2,000,000.
| Estate value | £800,000 |
|---|---|
| Debts | - |
| Net estate | £800,000 |
| Nil-rate band | −£325,000 |
| Residence nil-rate band | −£175,000 |
| Gift to charity | - |
| Taxable estate | £300,000 |
| Inheritance Tax rate | 40% |
| Inheritance Tax due | £120,000 |
Information
Inheritance Tax is charged at 40% on the part of your estate above your tax-free allowances. Most estates pay nothing, because the allowances are generous and transfers between spouses and civil partners are exempt.
The nil-rate band. Everyone can pass on £325,000 free of Inheritance Tax. This band has been frozen since 2009 and, following the Autumn 2024 Budget, stays frozen until 5 April 2030.
The residence nil-rate band. An extra £175,000 applies when you leave your main home to your direct descendants (children, grandchildren, including step, adopted and foster children). It is reduced by £1 for every £2 that your net estate exceeds £2,000,000, and disappears entirely once the net estate reaches £2,350,000.
Transferring allowances between partners. When the first spouse or civil partner dies, any unused nil-rate band and residence nil-rate band pass to the survivor. A widow or widower who inherited both bands in full can leave up to £1,000,000 tax-free.
The reduced 36% charity rate. Leaving at least 10% of the net estate (after the nil-rate bands) to charity cuts the rate on the rest of the estate from 40% to 36%, and the charitable gift itself is exempt.
What's not modelled. Gifts made in the seven years before death and their taper relief, Business Relief and Agricultural Relief, trusts, and pension funds brought into the estate from 6 April 2027. This calculator values the death estate you enter; for a plan involving those reliefs, use a tax adviser.
FAQ
- How much can I pass on before Inheritance Tax?
Everyone has a £325,000 nil-rate band that passes free of Inheritance Tax. If you leave your home to your children or grandchildren you may also get the £175,000 residence nil-rate band, taking the total to £500,000. Anything above your available bands is taxed at 40%.
- How does a couple pass on £1 million tax-free?
When the first spouse or civil partner dies, any allowances they did not use pass to the survivor. A widow or widower can inherit up to a full extra £325,000 nil-rate band and £175,000 residence nil-rate band, so a surviving partner leaving a home to their descendants can have £1,000,000 of allowances in total. Tick 'widowed' and enter the percentage of each band the late partner left unused.
- What is the £2 million taper?
The residence nil-rate band is reduced by £1 for every £2 that the net estate exceeds £2,000,000. A full £175,000 residence band is wiped out entirely once the net estate reaches £2,350,000. The ordinary £325,000 nil-rate band is never tapered.
- How does leaving money to charity cut the rate to 36%?
If you leave at least 10% of your net estate (after deducting the nil-rate bands) to charity, the Inheritance Tax rate on the rest of the estate falls from 40% to 36%. The charitable gift itself is also exempt, so a large enough gift can leave your other beneficiaries better off than a smaller one.
- Does this include gifts I made before I died?
No. This calculator covers the death estate only. Gifts made in the seven years before death can also be chargeable, with taper relief on the tax where the gift was made three to seven years before death. That treatment is not modelled here yet.
- Are ISAs and pensions free of Inheritance Tax?
ISAs form part of your estate and are not exempt from Inheritance Tax, though a surviving spouse can inherit the ISA tax wrapper. Most pension pots have historically passed outside the estate, but from 6 April 2027 unused pension funds are brought into the estate for Inheritance Tax. This calculator values the estate you enter and does not separately model pensions yet.
Recent changes
-
Unused pension funds are brought into the estate for Inheritance Tax for the first time. Before this date, most defined-contribution pensions passed outside the estate.
-
Business Relief and Agricultural Relief reformed: a combined £1,000,000 allowance keeps 100% relief, with 50% relief above it. AIM shares drop to 50% relief.
-
The Autumn 2024 Budget extended the freeze on the £325,000 nil-rate band and the £175,000 residence nil-rate band to 5 April 2030.
Sources
Disclaimer
Not financial or legal advice. Figures are computed from HMRC's published nil-rate bands and rates and cover the death estate only. They don't account for lifetime gifts, Business or Agricultural Relief, trusts, or pension funds brought into the estate. Consult a solicitor or an accountant for the authoritative figure on a specific estate.
