Free UK Tool · 2025/26 Rates

Inheritance Tax Calculator

Calculate the potential IHT bill on an estate. Covers the nil rate band, residence nil rate band, spouse allowance transfer, and charitable giving.

10%+ of net estate triggers the 36% reduced IHT rate
IHT Bill
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At 40%
Total Estate
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Before tax
IHT Threshold
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NRB + RNRB
Estate to Beneficiaries
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After IHT

Common questions

The nil rate band (NRB) is £325,000 — frozen until 2029/30. The Residence Nil Rate Band (RNRB) is an additional £175,000 when a main home passes to direct descendants. Combined: £500,000 per person. Married couples/civil partners can transfer unused allowances, giving up to £1,000,000 combined.
An additional £175,000 IHT allowance that applies when a main residence (or its proceeds) passes to direct descendants — children, stepchildren, adopted children, or grandchildren. It tapers by £1 per £2 of estate above £2,000,000 and is fully withdrawn at £2,350,000 (or £2,700,000 for couples).
Yes. Unused NRB and RNRB from a deceased spouse or civil partner can be transferred to and claimed by the surviving spouse's estate. If the first spouse used none of their allowances, the survivor can claim double (£650,000 NRB + £350,000 RNRB = £1,000,000 total threshold).
Gifts made more than 7 years before death are generally exempt from IHT. Gifts made within 7 years may be included (Potentially Exempt Transfers). Taper relief reduces the rate on gifts made 3–7 years before death: 32% at 3–4 years, 24% at 4–5 years, 16% at 5–6 years, 8% at 6–7 years.
Key exemptions: assets to a spouse/civil partner (unlimited); charitable gifts; annual gift exemption (£3,000/year); small gift exemption (£250 per person); wedding gifts; normal expenditure out of income; and Business/Agricultural Property Relief (50% or 100% on qualifying assets). Pension funds are generally outside the estate (though this is changing from April 2027).
Yes — in two ways. Charitable gifts are themselves IHT-exempt. And if you leave 10% or more of your net estate to charity, the IHT rate on the remaining taxable estate reduces from 40% to 36%. This can sometimes mean leaving more to charity actually increases what your other beneficiaries receive after tax.
Within 6 months of the end of the month of death. Interest accrues on late payment. The executor pays IHT from the estate before distributing to beneficiaries. A reference number from HMRC must be obtained before probate is granted. IHT on property can be paid in instalments over 10 years in some cases.

How Inheritance Tax Works

Inheritance tax (IHT) is charged at 40% on the taxable portion of an estate above the available threshold. In practice, because of exemptions and reliefs, only around 4–5% of estates pay it — but those that do face a significant bill. Understanding the thresholds and how they stack is the starting point for any estate planning.

The nil rate band and residence nil rate band

Every individual has a nil rate band (NRB) of £325,000. This has been frozen at this level since 2009 and will remain frozen until at least 2030. The residence nil rate band (RNRB) adds a further £175,000 if you leave your main home (or its equivalent value) to direct descendants — children, grandchildren, or step-equivalents. Between them, an individual can pass up to £500,000 without IHT, and a couple can potentially pass up to £1,000,000.

Transferring thresholds between spouses

Any unused NRB and RNRB from a deceased spouse can be transferred to the surviving spouse's estate. This is not automatic — the executors of the survivor's estate must claim it. It allows couples who leave everything to each other (which is itself IHT-exempt as a spouse transfer) to effectively double the thresholds available on second death.

The RNRB taper

The RNRB tapers for large estates. For every £2 by which the net estate exceeds £2 million, the RNRB is reduced by £1. At £2,350,000 the full RNRB is lost (for a single person). This taper only affects the RNRB, not the basic NRB.

The 36% charity rate

If you leave at least 10% of your net estate to qualifying charities, the IHT rate on the rest drops from 40% to 36%. For estates where the charity gift is borderline 10%, it can be worth topping up the gift slightly — the tax saving on the remaining estate may exceed the extra donation.

IHT and pensions from April 2027

Currently, defined contribution pensions do not form part of your estate for IHT purposes. This is proposed to change from April 2027, when unspent pension funds will be included in the estate calculation. This is a significant change that makes estate planning with pensions more complex. If you have a large pension pot, specialist advice is recommended ahead of these changes.