Inheritance Tax Calculator (UK 2026/27)
Calculate how much Inheritance Tax is due on an estate after the nil-rate band, residence nil-rate band, and any exemptions are applied.
UK Inheritance Tax Guide
IHT Thresholds 2026/27
Inheritance Tax is charged at 40% on the taxable estate above the threshold. The nil-rate band (NRB) is £325,000 per person and has been frozen at this level since 2009. The Residence Nil-Rate Band (RNRB) adds up to £175,000 when a main residence is left to direct descendants (children, grandchildren, step-children). Combined, a single person can leave up to £500,000 tax-free. For married couples and civil partners, unused allowances can be transferred, giving a combined threshold of up to £1,00
Spouse and Civil Partner Exemption
Transfers between UK-domiciled spouses and civil partners are entirely exempt from IHT — no limit. Assets passing to a surviving spouse do not use up any nil-rate band. On the surviving spouse's death, any unused NRB and RNRB from the first spouse can be claimed, effectively doubling the threshold. This is why IHT planning is particularly important after the second death, when the combined estate above £1,000,000 (or £650,000 if no property left to children) becomes taxable.
The 10% Charity Reduction
If 10% or more of the net estate (after deductions but before the 40% tax) is left to charity, the IHT rate reduces from 40% to 36%. For a £1,000,000 estate with a £500,000 threshold, the taxable estate is £500,000. The 10% threshold for the reduced rate is £50,000 (10% of £500,000). Leaving £50,000+ to charity: tax = 36% × £450,000 = £162,000 instead of 40% × £500,000 = £200,000 — the charity donation and reduced rate combine to save more than expected.
IHT Planning Strategies
The 7-year rule: gifts made more than 7 years before death are completely exempt. Gifts within 7 years use the NRB and may attract taper relief (40%→32%→24%→16%→8%→0% for years 3–7). Annual gift exemption: £3,000 per year can be given free of IHT regardless. Wedding gifts: £5,000 to a child, £2,500 to a grandchild. Normal expenditure out of income is exempt if it does not reduce the standard of living. Business Property Relief (100%) and Agricultural Property Relief (100%) can significantly redu
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