Inheritance Tax Calculator
Estimate UK Inheritance Tax with the nil-rate band, residence nil-rate band and spouse transfers.
About the Inheritance Tax Calculator
The first £325,000 of an estate is tax-free (nil-rate band). If a home goes to direct descendants, the residence nil-rate band adds up to £175,000, tapered by £1 for every £2 the estate exceeds £2 million. Unused allowances pass to a surviving spouse or civil partner, so a couple can leave up to £1 million tax-free. Both bands are frozen until April 2031.
Tax above the allowances is 40%, or 36% if at least 10% of the net estate goes to charity. From April 2027 most unused pension pots will count toward the estate.
The formula
IHT = (estate − exempt gifts − £325,000 − RNRB) × 40%
Worked example
Example: Inheritance Tax = £196,000
- Inputs: Value of the estate (after debts): £990,000; Home left to children or grandchildren (0 if none): £500,000; Unused allowances from a late spouse: None; Left to charity: £0; Left to a spouse or civil partner (exempt): £0.
- Formula: IHT = (estate − exempt gifts − £325,000 − RNRB) × 40%
- Result: Inheritance Tax = £196,000
- Nil-rate band: £325,000
- Residence nil-rate band: £175,000
Questions people ask
Are gifts taxed?
Gifts made more than 7 years before death are usually exempt; smaller annual exemptions apply too.
Who pays?
The executors, from the estate, usually within 6 months.