INHERITANCETAXCALCULATOR
Work out how much Inheritance Tax (IHT) your estate could owe. Includes nil rate band, residence nil rate band, and spouse exemptions for 2025/26.
Marital Status
Leaving Home to Direct Descendants?
Estate Details
About UK Inheritance Tax (IHT)
Nil Rate Band
Everyone gets a £325,000 nil rate band — the first chunk of your estate that's completely free of IHT. It's been frozen at this level since 2009. Married couples can transfer any unused portion to the survivor.
Residence Nil Rate Band
An extra £175,000 allowance if you leave your main home to direct descendants (children, grandchildren, step-children). For estates over £2 million, this tapers away at £1 for every £2 over the threshold.
The 7-Year Rule
Gifts made more than 7 years before death are completely exempt from IHT. Gifts within 3-7 years benefit from taper relief — the tax rate reduces gradually. Within 3 years, the full 40% applies.
This calculator provides an estimate based on standard IHT rules for England and Wales. Business relief, agricultural relief, and charity donations may reduce IHT further. Always consult a qualified financial adviser or solicitor for estate planning advice.
What Is Inheritance Tax?
Inheritance Tax is the 40% tax nobody wants to think about — but probably should. It's charged on your estate (everything you own minus what you owe) when you die, if it's worth more than the nil rate band of £325,000. That threshold has been frozen since 2009, while property prices have more than doubled, which means hundreds of thousands more families now face an IHT bill that was once reserved for the genuinely wealthy. If you're married or in a civil partnership, assets pass between spouses tax-free, and any unused allowance transfers to the surviving partner.
How to Use This Calculator
Enter your estate details and the calculator works out your IHT liability in real time, factoring in both nil rate bands and your marital status.
Add Up Your Estate
Enter the total value of everything you own — property, savings, investments, personal possessions. Include the value of your main residence separately so the calculator can apply the residence nil rate band correctly.
Subtract Debts and Add Gifts
Enter any debts (mortgage, loans, credit cards) which reduce the taxable estate. Add any gifts you've made in the last 7 years — these are brought back into the estate for IHT purposes.
Choose Your Circumstances
Select your marital status (married couples get double the allowances) and whether you're leaving your home to direct descendants (children or grandchildren) to unlock the residence nil rate band.
How Inheritance Tax Is Calculated
The nil rate band is £325,000 per person (£650,000 for married couples using the transferable allowance). The residence nil rate band adds £175,000 per person (£350,000 for couples) when the family home passes to direct descendants. This means a married couple leaving their home to their children can pass on up to £1 million tax-free. Above the threshold, IHT is charged at 40%. Estates that leave 10% or more to charity qualify for a reduced rate of 36%. For estates over £2 million, the RNRB tapers — reduced by £1 for every £2 over the threshold.
Tips & Best Practices
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Use the 7-year rule: gifts made more than 7 years before death fall outside your estate entirely. You can also give away £3,000 per year using the annual exemption without starting the 7-year clock
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Married couples should plan together — the surviving spouse inherits any unused nil rate band, but you need to claim it through the estate. Keep records of the first spouse's estate
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Consider a whole-of-life insurance policy written in trust to cover the expected IHT bill. Written in trust means the payout goes directly to beneficiaries without forming part of your estate
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Look into trusts for assets you don't need day-to-day. Discretionary trusts can remove assets from your estate, though they come with their own tax rules and a 10-year charge
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If your estate is close to £2 million, watch the RNRB taper. Pension death benefits don't count towards the £2 million threshold (from April 2027 they will), so maximising pension savings can help preserve the full RNRB
Frequently Asked Questions
Mandeep Singh · 25+ Years UK Financial Services
Important Information
This calculator is for informational purposes only and does not constitute financial advice or a personal recommendation.
Results are estimates based on the information you provide and may not reflect your actual financial position.
You should consider seeking independent professional advice tailored to your specific circumstances before making any financial decision.