UK Inheritance Tax Calculator

Estimate your IHT liability with the £325k nil-rate band, £175k residence nil-rate band, spousal transfer, and the £2m taper. 2026-27 thresholds.

Read the full UK Inheritance Tax guide

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Your estate

Total estate value£800,000

Property + investments + pensions outside the wrapper + everything else.

Of which, your home is worth£400,000

Leaving home to direct descendants?

Children, grandchildren, step-children. Adds the £175k RNRB.

Spouse died before you, transferring their allowances?

If yes, up to double the £325k and £175k allowances.

Taxable gifts made in last 7 years£0

Excludes the £3k annual exemption and small-gift exemptions.

What happens to my data?

All calculations run in your browser. Nothing is sent to our servers. Copy the link to share.

Estimated IHT

£120,000

Effective rate

15.0%

Total tax-free

£500,000

Taxable estate

£300,000

Allowances

Nil-rate band	£325,000
Residence nil-rate band	£175,000
Total tax-free	£500,000
Taxable estate	£300,000

Reliefs at a glance

Standard NRB: £325,000 per person.
Residence NRB: £175,000 if leaving home to direct descendants. Tapers above £2m estate.
Spouse transfer: any unused NRB or RNRB transfers to the surviving spouse, potentially doubling them.
7-year rule: larger gifts fall outside the estate if you survive 7 years. Taper relief between 3 and 7.
Rate: 40% on whatever sits above the combined allowances.

The complete guide

UK Inheritance Tax Calculator: How to Read the Result

How to use the UK IHT calculator: estate inputs, the £325k + £175k bands, spousal transfer, the £2m taper, and what the bill on screen actually means.

The UK Inheritance Tax calculator takes five inputs and gives you an estimate of the IHT that would apply to your estate today, using 2026-27 thresholds. If you want the full topic - the seven-year rule mechanics, every exempt asset, the planning routes worth taking - read the standalone Inheritance Tax UK guide. This page is the manual for the tool: which input does what, what the number on screen actually represents, and where the calculator simplifies real life.

How the calculator walks through your estate
The two thresholds it stacks
Worked 2026-27 example
The £2m taper trap
What the calculator doesn't model

How the Calculator Walks Through Your Estate

Five inputs feed the result. Each one moves the bill in a specific direction.

Total estate value. Property at current market value, ISAs, GIAs, cash, vehicles, valuables, and any pension money already drawn down. For 2026-27 the calculator treats defined contribution pension wrappers as outside the estate, so don't include the SIPP balance here. That changes from April 2027 (see below).

Home value. A subset of the total estate. The calculator uses this to apply the Residence Nil-Rate Band against the home specifically. If you don't own a home or you rent, enter zero.

Leaving home to direct descendants? Yes/No. This is the switch that adds the £175,000 RNRB. Direct descendants means children, grandchildren, stepchildren, and adopted children. Nieces, nephews, siblings, and friends do not count. If your will leaves the house to a sibling, switch this to No and watch the threshold drop by £175k.

Spousal transfer. Yes/No. Toggling Yes assumes 100% of a deceased spouse's unused NRB and RNRB transfer to your estate, doubling both bands. This is how the calculator gets to the £1m headline figure for couples. If your first spouse died and the executor never claimed the transferred allowance, or if their estate used some of their NRB, the real figure is less than the toggle assumes - the tool doesn't model partial transfers.

Taxable gifts in last 7 years. Cash and asset gifts above the annual exemptions, made in the seven years before the calculation date. The calculator adds these back to the estate before applying the bands, which is the same order HMRC uses. It does not yet model taper relief on the gift itself - it treats the gift as fully taxable, which is conservative.

The Two Thresholds It Stacks

Two tax-free bands sit on top of each other.

The Nil-Rate Band is £325,000. Every individual gets it. It has been frozen since 2009 and is set to stay frozen until at least April 2030.

The Residence Nil-Rate Band adds £175,000 on top, but only when the home (or its sale proceeds) passes to direct descendants. That's the £325k + £175k = £500,000 single-homeowner figure.

The calculator's spousal-transfer toggle doubles both bands. £650,000 NRB + £350,000 RNRB = £1,000,000. That is where the "couples can pass £1m tax-free" line in every tabloid headline comes from. Anything above the combined threshold is taxed at 40%. The Allowances table in the result panel breaks it out line by line, so you can see which band is doing the work and which one isn't kicking in.

Worked 2026-27 Example

Plug these into the calculator:

Total estate value: £900,000
Home value: £400,000
Leaving home to descendants: Yes
Spousal transfer: Yes
Gifts in last 7 years: £0

The Allowances table shows:

Nil-rate band: £650,000 (doubled by the spousal transfer)
Residence nil-rate band: £350,000 (doubled, and capped at the £400k home value)
Total tax-free: £1,000,000
Taxable estate: £0

The Estimated IHT result reads £0. Effective rate 0.0%. This is the canonical "married couple, family home to the kids, under the £1m line" scenario - and the reason most people who land on the calculator and run their actual numbers walk away relieved.

Now drop the spousal-transfer toggle to No. Same estate, single owner. NRB stays at £325k, RNRB at £175k, total tax-free £500,000. Taxable estate jumps to £400,000. The bill is £160,000. The effective rate climbs from 0% to 17.8%. The spousal-transfer toggle is the single biggest lever in the tool.

The £2m Taper Trap

The result panel shows an amber warning if your estate is above £2m: "Residence nil-rate band tapered". This is the line most people miss.

Above a £2m estate value, the £175,000 RNRB is reduced by £1 for every £2 the estate exceeds £2m. So at £2.1m, you lose £50k of RNRB (down to £125k). At £2.2m you lose £100k (down to £75k). At £2.35m the RNRB is gone entirely. The doubled version for couples lasts longer - £350k of RNRB tapers fully away by £2.7m of combined estate.

If you push the estate value up past £2m and the bill jumps faster than you expected, that's the taper biting. The Allowances table will quietly show the RNRB falling while the headline estate value rises. One option people explore with a qualified adviser is gifting capital out of the estate to get below £2m before death, so the full RNRB applies. The calculator doesn't model gifting strategies - it just shows you the current bill - but the size of the taper trap is what makes the topic worth raising with a solicitor or Chartered Financial Planner.

What the Calculator Doesn't Model

The tool is deliberately simple. Five things it doesn't handle:

Business Relief and Agricultural Property Relief. Qualifying unlisted shares (including most AIM-listed companies) and farmland can get up to 100% IHT relief after a two-year hold, with a £1m cap on the 100% rate from April 2026. If you hold these, the real bill is lower than the calculator says. The standalone IHT guide covers the rules.

Trusts. Discretionary trusts, interest-in-possession trusts, and the gift-with-reservation-of-benefit anti-avoidance rules. If your estate plan involves trust structures, this calculator won't reflect them.

The 36% charitable rate. Leaving 10% or more of the net estate to charity drops the rate on the rest from 40% to 36%. The calculator uses the flat 40%.

Taper relief on gifts. Gifts made 3 to 7 years before death attract tapered IHT rates on the portion above the nil-rate band: 32%, 24%, 16%, and 8% (per HMRC's published taper schedule). The calculator treats all gifts in the 7-year window as fully taxable, which is the conservative read.

Pensions from April 2027. Defined contribution pensions sit outside the estate for IHT in 2026-27. The Treasury confirmed at Autumn Budget 2024 that unused pension funds and death benefits will be brought into IHT from April 2027. If you are planning more than a year out, the calculator's pension-excluded assumption stops being right.

For everything the calculator does include, pair it with the CGT calculator if you're modelling lifetime gifts of investments, and the life plan calculator if you want to see how drawdown affects the estate over a 20- to 40-year horizon.

Frequently asked questions

How much can a married couple pass on without paying Inheritance Tax in the UK?

Up to £1,000,000 if the family home (or the proceeds of selling it) passes to direct descendants. That is built from two £325,000 nil-rate bands plus two £175,000 residence nil-rate bands, with unused allowances transferring on the first death. Estates above £2 million see the residence band taper away, and it disappears entirely at £2.35 million.

What is the seven-year rule on lifetime gifts?

Gifts made within seven years of death are added back to the estate for the IHT calculation. If the cumulative gifts sit within the £325,000 nil-rate band, no extra IHT is due. Above the band, the tax on the excess tapers from 40% to 0% based on how long ago the gift was made: 40% in years 0 to 3, then 32%, 24%, 16%, 8%, and 0% from seven years onwards.

Are pensions subject to Inheritance Tax in the UK?

In 2026/27, defined contribution pensions remain outside the estate for IHT purposes, which makes them the most tax-efficient asset to inherit. The Treasury has announced that pensions will be brought into IHT from April 2027, so anyone planning long-term should factor in the upcoming change.

What counts as my estate for Inheritance Tax?

Everything you own at the date of death (property, investments, ISAs, cash, vehicles, valuables) minus any debts and reasonable funeral expenses. Defined contribution pensions are usually excluded in 2026/27. Assets passing to a spouse or civil partner, or to a UK charity, are exempt and do not generate an IHT bill.

Which gift allowances can I use every year without affecting my estate?

The £3,000 annual exemption (carryable one year if unused), the £250 small-gift allowance per recipient, wedding gifts (£5,000 to a child, £2,500 to a grandchild, £1,000 to anyone else), and regular gifts out of surplus income. Surplus-income gifts are unlimited as long as they come from regular income, do not reduce your standard of living, and form part of a normal pattern.

How long does Inheritance Tax take to pay?

IHT is generally due six months after the end of the month of death. Probate cannot be granted until the bill (or the part not relating to property and certain other assets) is paid. Executors can pay over ten years in instalments for property, with interest. Most estates settle within 12 to 18 months.

Should I use a trust to avoid Inheritance Tax?

Most off-the-shelf "IHT trusts" do not work because the gift-with-reservation-of-benefit rules pull the asset back into your estate if you continue to benefit from it. Trusts have legitimate uses (protecting minor beneficiaries, controlling distributions), but for IHT planning the simple tools (spousal transfers, annual gifting, surplus-income gifts, and pension structuring) usually beat complex structures. Speak to a Chartered Financial Planner or STEP solicitor before relying on any trust arrangement.

Why does the calculator drop my Residence Nil-Rate Band when I lift the estate value?

Because of the £2m taper. Once total estate value crosses £2m, the £175,000 RNRB falls by £1 for every £2 over the threshold. The amber warning in the result panel flags it, and the Allowances table shows the reduced RNRB figure. At a £2.35m estate the RNRB is gone entirely (or £2.7m for a couple with the spousal transfer toggled on).

Does the calculator handle pensions?

Not really. It assumes defined contribution pension wrappers are outside the estate, which is correct for 2026-27. Do not enter your SIPP balance in the estate value field today. From April 2027 the Treasury intends to bring unused pension funds and death benefits inside IHT (confirmed at Autumn Budget 2024). If you are modelling beyond that date, add the pension into the estate value manually.

Why does not transferring my unused allowance to my spouse show £1m?

Two reasons. First, the £1m headline figure assumes both the £650k NRB and the £350k RNRB are doubled - which only happens when a home worth at least £350k passes to direct descendants. If your home is worth £200k, the doubled RNRB is capped at £400k (£200k each), and the combined threshold drops accordingly. Second, if you toggled "Leaving home to descendants" to No, the RNRB is zero regardless of the spousal transfer.

Can I see what happens if I gift £50k now?

Roughly, yes. Drop £50k off the Total Estate Value and rerun. That shows the position if you survive the gift by seven years. To see the position if you do not survive seven years, leave the estate value alone and enter £50k in the "Taxable gifts in last 7 years" field - the calculator adds it back to the estate. The difference between the two outputs is the IHT exposure the seven-year clock is buying you down. The annual £3,000 exemption and the surplus-income rule sit outside this calculation entirely; those gifts never count.

Why is my effective rate lower than 40%?

The headline IHT rate is 40% on the excess above the combined threshold, not 40% on the whole estate. The effective rate the calculator shows is the IHT bill divided by the total estate value. On a £600k single-homeowner estate with the home to children, only £100k is taxable, so the bill is £40k - an effective rate of 6.7%, not 40%. The effective rate is the more useful number for planning, because it tells you what proportion of your wealth HMRC actually takes.