UK Inheritance Tax Calculator

The standard Inheritance Tax rate is 40%, charged only on the part of an estate above the available nil-rate bands. A reduced rate of 36% applies if at least 10% of the net estate (the baseline amount) is left to charity. Estates within the nil-rate bands pay no Inheritance Tax at all.

The nil-rate band (NRB) is the amount of an estate that is taxed at 0%. For 2025/26 it is £325,000 per person. Only the value above this (and above any residence nil-rate band) is taxed at 40%. The £325,000 band has been frozen since 2009 and is set to remain fixed until 5 April 2030.

The residence nil-rate band (RNRB) is an extra allowance — up to £175,000 for 2025/26 — that applies when you leave your main home (or its value) to direct descendants such as children, stepchildren or grandchildren. It is capped at the value of the property passed on and is added on top of the £325,000 nil-rate band.

An individual can leave up to £325,000 tax-free, rising to £500,000 if they leave a home worth at least £175,000 to direct descendants (£325,000 + £175,000). A married couple or civil partners can combine allowances to pass on up to £1 million between them, because unused allowances transfer to the survivor.

When the first spouse or civil partner dies, anything left to the survivor is exempt, and the deceased's unused nil-rate band and residence nil-rate band pass to the survivor. On the second death the estate can use two full sets of bands — up to £325,000 + £175,000 doubled = £1,000,000 — provided a qualifying home passes to descendants.

For estates worth more than £2 million, the residence nil-rate band is reduced by £1 for every £2 above the £2 million threshold. So a £175,000 RNRB is fully tapered away once the estate reaches £2.35 million (or £2.7 million where a transferred RNRB doubles it). This calculator applies the taper automatically.

No. Transfers between UK-domiciled spouses and civil partners are completely exempt from Inheritance Tax, whether made during life or on death. This spouse exemption, combined with the transferable nil-rate band, is why most married couples pay no IHT until the second death.

If you leave at least 10% of your 'baseline amount' (broadly the estate after deducting the nil-rate bands) to charity, the Inheritance Tax rate on the rest of the estate falls from 40% to 36%. The charitable gift itself is also exempt, so the combination can mean your heirs receive almost as much while more goes to good causes.

The baseline amount is the value of the estate after subtracting the available nil-rate bands (but before deducting the charitable gift itself). Your charitable donation must be at least 10% of that figure to qualify for the 36% rate. This calculator tests the 10% condition for you when you enter a charity percentage.

For 2025/26, most unused pension funds and death benefits fall outside your estate for Inheritance Tax. However, the Government has announced that from 6 April 2027 most unused pensions will be brought within the Inheritance Tax net — a major change for estate planning that this calculator does not yet apply.

Gifts you make during your lifetime are usually 'potentially exempt' and become fully tax-free if you survive seven years. If you die within seven years, they count against your nil-rate band, with taper relief reducing the tax on gifts made three to seven years before death. This calculator values the estate at death and does not model lifetime gifts.

You can give away up to £3,000 per tax year free of Inheritance Tax (and carry forward one unused year), plus small gifts of up to £250 per person, regular gifts out of surplus income, and wedding gifts within set limits. Using these exemptions each year is a simple way to reduce a future Inheritance Tax bill.

Yes. Business Relief and Agricultural Relief can reduce the value of qualifying business or farm assets by 50% or 100%. From April 2026 these reliefs are being capped at £1 million of 100% relief per person, with a 50% rate above that — a significant change for business and farm owners. This calculator does not apply these reliefs.

Inheritance Tax is normally due by the end of the sixth month after death, and the executors or personal representatives pay it from the estate before assets are distributed. Tax on some assets, such as property, can be paid in instalments over up to 10 years. Interest runs on tax paid late.

Often yes. Many estates are 'excepted' and need only limited reporting, but larger estates or those using transferred allowances usually require a fuller account to HMRC. Even where no tax is payable, executors may need to submit forms to claim the transferable nil-rate band, so check the requirements early.

The estate is everything the deceased owned — property, savings, investments, vehicles, and personal possessions — valued at the date of death, less debts, mortgages and reasonable funeral expenses. Jointly owned assets and certain trusts can also count. Enter the net figure (after debts) as the estate value.

Yes. Inheritance Tax is a UK-wide tax with the same rates and allowances in England, Wales, Scotland and Northern Ireland. Unlike income tax, there is no separate Scottish rate for Inheritance Tax, so this calculator applies throughout the UK.

Potentially, though double taxation is usually relieved. The UK charges Inheritance Tax based on domicile and UK assets, while the US charges estate tax on citizens' worldwide estates — but the US has a very high exemption (over $13 million) and a US/UK estate and gift tax treaty allocates taxing rights and gives credits. Anyone with assets or connections in both countries should take specialist cross-border advice.

The UK taxes estates above roughly £325,000–£1 million at 40%, so it affects many ordinary homeowners. US federal estate tax only applies above a very large exemption (about $13.99 million per person for 2025) but at rates up to 40%. The systems, exemptions and reliefs are entirely different, which is why cross-border estates need careful planning.

It uses the 2025/26 figures — the £325,000 nil-rate band, £175,000 residence nil-rate band, the £2 million taper threshold, and the 40%/36% rates — and models transferable spouse allowances and the charity rate. It does not apply lifetime gifts, business/agricultural relief, trusts or the upcoming pension changes, so treat the result as a planning estimate.

No — the calculation runs entirely in your browser and nothing is stored unless you choose to download the branded PDF report, at which point you provide your name and email so we can send it. Phone and address are optional.

Yes. Enter your name and email (phone and address optional) and we generate a TaxStone-branded PDF of your Inheritance Tax estimate to download instantly — useful for estate planning or discussing with a solicitor or adviser.

For estates near or above the nil-rate bands — especially with a business, a large property, or US/UK cross-border assets — the right structure, gifts and reliefs can legitimately save hundreds of thousands in Inheritance Tax. Book a free 20-minute call with a TaxStone adviser to review your position.