IHT Calculator — UK Inheritance Tax
UK Inheritance Tax calculator
Estimate the Inheritance Tax due on a UK estate. Includes the Nil-Rate Band, transferable spouse band, the Residence Nil-Rate Band with the £2m taper, and the 36% reduced rate for estates that leave 10% or more to charity. Indicative only — gifts, trusts, business and agricultural relief can change the answer.
Estimate the IHT
2026/27: NRB £325,000 (frozen to April 2030). RNRB £175,000, tapered £1 for every £2 of estate over £2m. Rate 40%, or 36% where 10%+ of taxable estate goes to charity.
How IHT works
Inheritance Tax is charged at 40% on the part of an estate above the available allowances. Most estates do not pay IHT — fewer than 5% do — but the proportion is rising as house prices grow while the allowances stay frozen.
- Nil-Rate Band (NRB): £325,000 each. Frozen until April 2030.
- Transferable NRB: a widow or widower inherits any unused percentage from a late spouse, so a couple can have up to £650,000 between them.
- Residence Nil-Rate Band (RNRB): an extra £175,000 if you leave your home (or a share of it) to direct descendants. Lost £1-for-£2 once an estate exceeds £2m, so it disappears entirely above £2.35m (single) or £2.7m (couple).
- Charity rate: leave 10%+ of the taxable estate to charity and the rate drops from 40% to 36%.
- Spouse exemption: anything you leave to a UK-domiciled spouse or civil partner is fully exempt from IHT.
From April 2026, Business Property Relief and Agricultural Property Relief will be capped at a combined £1m of 100% relief, with 50% relief above. Pensions also become subject to IHT from April 2027 — a major change worth planning for.
Frequently asked questions
Do I need to pay IHT if I leave everything to my spouse?
No. Transfers between UK-domiciled spouses or civil partners are fully exempt from IHT. The unused allowances also pass across, so the surviving spouse can use both NRBs and both RNRBs on second death.
What counts as a “direct descendant” for the RNRB?
Children (including step, adopted and foster), grandchildren and their descendants. Spouses and civil partners of those descendants also count. Siblings, nieces and nephews do not — leaving a home to them does not unlock the RNRB.
What about gifts I made before death?
Gifts in the seven years before death may be added back into the estate. Gifts are PETs (potentially exempt transfers) and only become exempt after seven years. Annual exemptions of £3,000, regular gifts out of income, and the small-gifts and wedding-gift exemptions can also reduce the estate.
How does the 10% to charity rate work?
If you leave 10% or more of your “net” estate (after NRB, RNRB and spouse exemption) to a registered charity, the IHT rate on the rest of the taxable estate drops from 40% to 36%. The savings often more than cover the charity gift for the family.
What about pensions?
Currently most defined-contribution pensions sit outside the estate for IHT. From April 2027 that changes — unused pensions on death will be added to the estate. Worth reviewing nominations and drawdown plans before then.
Want to plan this properly?
The calculator is a starting point. Estate planning works best when started early — gifts, trusts, business reliefs and pensions can all be optimised. We work alongside your solicitor to look after the tax and accounting side.