← Home

Inheritance Tax Calculator

Estimate Inheritance Tax on an estate for the 2026/27 tax year, including the residence nil-rate band, spouse transfer and the £2m taper.

Inputs

GBP
Nil-rate band £325,000; residence nil-rate band £175,000 when a main home passes to direct descendants. Unused allowances transfer from a late spouse (up to £1m combined). The residence band tapers by £1 for every £2 of estate above £2m. Excludes the 7-year gift rule, business/agricultural relief and other reliefs.

Inheritance Tax Due

40% above the threshold
£0

How Inheritance Tax works

Inheritance Tax (IHT) is charged at 40% on the value of an estate above the available threshold. Everyone has a £325,000 nil-rate band; if a main home passes to direct descendants, a further £175,000 residence nil-rate band applies, lifting an individual's threshold to £500,000. The estate — not the beneficiary — pays the tax.

Spouses and civil partners inherit from each other tax-free, and any unused allowances transfer to the survivor, so a married couple can pass on up to £1,000,000. For estates above £2,000,000 the residence band tapers away by £1 for every £2 of excess. The rate falls to 36% if at least 10% of the net estate is left to charity. Gifts made more than seven years before death usually fall outside the estate.

FAQ

How can a couple pass on £1m?
Each spouse has a £325,000 NRB and £175,000 RNRB. Unused allowances transfer to the survivor, giving up to £1,000,000 when a home passes to direct descendants.
What is the residence nil-rate band?
An extra £175,000 allowance available when your main home is left to children, grandchildren or other direct descendants. It tapers above a £2m estate.
How does the charity rate work?
Leaving at least 10% of the net estate to charity reduces the IHT rate on the rest from 40% to 36%.
Are gifts taxed?
Gifts made within seven years of death can be added back, with taper relief between years three and seven. This tool does not model lifetime gifts.