UK Inheritance Tax (IHT) is a tax on the estate of someone who has died, charged at 40% on the value above the nil-rate band threshold. With allowances including the residence nil-rate band, spouse transfer, and charitable giving relief, careful planning can significantly reduce the liability. Use this free calculator to estimate your IHT bill and understand how each allowance applies to your situation.
Estate Details
Include property, savings, investments, possessions
Main residence value (for RNRB eligibility)
% of deceased spouse's unused NRB to transfer
Children, grandchildren, etc. (enables RNRB)
10%+ qualifies for reduced 36% IHT rate
Gifts in Last 7 Years
Add gifts made within 7 years of death. Gifts over the annual exemption (currently £3,000/year) are potentially exempt transfers (PETs) and may be subject to taper relief.
Allowances Breakdown
| Allowance | Amount | Notes |
|---|---|---|
| Total Allowances | £0 |
Calculation Summary
Disclaimer: This calculator provides estimates based on 2025/26 IHT rules. Inheritance tax is complex and depends on individual circumstances. Always consult a qualified tax adviser or solicitor for professional guidance.
How to Use the UK Inheritance Tax Calculator
Inheritance Tax (IHT) can take a significant portion of an estate when someone dies. With the nil-rate band frozen at 325,000 pounds until 2030 and rising property values, more families are being caught by IHT than ever before. This calculator helps you estimate the potential IHT liability and understand which allowances and reliefs apply to your situation.
Step 1: Enter Your Estate Value
Start by entering the total value of the estate, including property, savings, investments, pensions (where applicable), and personal possessions. Then enter the property value separately, as this determines eligibility for the Residence Nil-Rate Band (RNRB). The property value should be included within the total estate value, not added on top.
Step 2: Set Your Marital Status
Your marital status significantly affects the inheritance tax threshold. Married couples and civil partners benefit from unlimited spouse exemption and can transfer unused nil-rate band allowances. If you are widowed, the deceased spouse's unused NRB can be transferred, effectively doubling the threshold to 650,000 pounds (or 1 million pounds including RNRB).
Step 3: Configure RNRB and Charity
Toggle the "home passed to direct descendants" option if the property will be inherited by children, grandchildren, or other lineal descendants. This unlocks the RNRB of 175,000 pounds. Note that the RNRB tapers for estates over 2 million pounds. If you plan to leave at least 10% of the net estate to charity, enter that percentage to qualify for the reduced 36% IHT rate instead of the standard 40%.
Step 4: Add Gifts Made in the Last 7 Years
Gifts made within 7 years of death are potentially liable for IHT. Add each significant gift with its value and how many years ago it was made. Gifts over 3 years old qualify for taper relief, which reduces the tax rate on those gifts. The calculator shows the taper relief schedule so you can see exactly how much is saved on each gift.
Understanding Your Results
The results show the taxable estate after all allowances, the total NRB and RNRB used, and the final IHT liability. The effective rate shows what percentage of the total estate goes to tax. The allowances breakdown table shows exactly how each relief contributes, and the calculation summary provides a step-by-step explanation of how the figure was reached. Remember that the nil-rate band is applied to gifts first, with any remaining allowance sheltering the estate.
FAQ
Is this inheritance tax calculator free?
Yes, this IHT calculator is completely free with no signup or account required. All calculations run locally in your browser. You can estimate inheritance tax liability as many times as you like at no cost.
Is my data safe when using this calculator?
Absolutely. All calculations happen entirely in your web browser using JavaScript. No estate values, property details, or personal information are sent to any server or stored anywhere.
What is the UK inheritance tax threshold for 2025/26?
The nil-rate band (NRB) is frozen at 325,000 pounds per person until 2030. If you pass your home to direct descendants, you also get the residence nil-rate band (RNRB) of 175,000 pounds, giving a combined threshold of 500,000 pounds per person or up to 1 million pounds for a married couple.
How does spouse transfer work for inheritance tax?
When one spouse dies and leaves everything to the surviving spouse, the unused nil-rate band and residence nil-rate band can be transferred. This means the surviving spouse can have up to 650,000 pounds NRB and 350,000 pounds RNRB, giving a combined threshold of 1 million pounds.
What is taper relief on inheritance tax?
Taper relief reduces the IHT rate on gifts made between 3 and 7 years before death. The relief is 20% for gifts 3-4 years old, 40% for 4-5 years, 60% for 5-6 years, and 80% for 6-7 years. Gifts made more than 7 years before death are fully exempt.
Can I reduce inheritance tax by giving to charity?
Yes. If you leave at least 10% of your net estate to qualifying charities, the IHT rate drops from 40% to 36%. This can sometimes mean leaving more to charity actually increases the amount your beneficiaries receive due to the lower tax rate.
What changes to inheritance tax take effect in April 2026?
From April 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) will be capped at a combined 1 million pounds at 100% relief. Qualifying agricultural and business assets above this threshold will only receive 50% relief, meaning the excess is taxed at an effective rate of 20%.
Does the residence nil-rate band taper for large estates?
Yes. The RNRB starts to taper when the total estate value exceeds 2 million pounds. It reduces by 1 pound for every 2 pounds over the 2 million threshold. For a single person, the RNRB is fully lost when the estate reaches 2.35 million pounds.