Calculators
Inheritance tax calculator
A quick estimate of what your estate might owe, and how much would reach the people you choose. It takes about a minute.
What this means
How it works
How inheritance tax is worked out
Inheritance tax is charged on what you leave behind, after debts and funeral costs, above a set of allowances. The first is the nil-rate band of £325,000, which has not changed since 2009. The second is the residence nil-rate band of up to £175,000, available when a home, or the proceeds of one you sold to downsize, passes to your children, grandchildren or their spouses.
Anything left to a husband, wife or civil partner is exempt, and whatever part of the two allowances the first of you does not use passes to the survivor. That is why a couple who leave everything to each other can usually pass on up to £1 million between them before tax is due on the second death.
Above the allowances, the rate is 40%. On an estate of £900,000 with one person's allowances and a £450,000 home left to children, £500,000 is covered and the remaining £400,000 is taxed, giving a bill of £160,000.
Where estates get caught out
- Frozen thresholds. House prices and investments have risen for years while the allowances have stood still, so more ordinary estates now cross the line.
- The £2 million taper. Above £2 million the residence nil-rate band is steadily withdrawn, which produces an effective rate of 60% on that slice of the estate.
- Pensions from April 2027. Most unused pension funds will be counted in the estate for deaths on or after 6 April 2027. Families who planned to pass pensions on untouched are revisiting the order in which they spend their savings.
- Homes not left to direct descendants. The residence nil-rate band is lost if the home goes to a sibling, niece, nephew or friend, or into certain kinds of trust.
What an adviser would look at
The calculator gives you the size of the question. An adviser looks at the answers: how much you can afford to give away and when, whether a trust would help or simply complicate things, whether life cover written in trust is a cheaper way of meeting the bill, and how to draw on pensions, ISAs and other savings so that what is left is taxed as lightly as the rules allow.
Business and agricultural property have their own reliefs. Since 6 April 2026, 100% relief applies to the first £2.5 million of qualifying business and agricultural property combined, with 50% relief above that, and shares on markets such as AIM qualify for 50% relief. This calculator does not apply those reliefs.
Questions
Inheritance tax questions
How much can I leave before inheritance tax is due?
Everyone has a nil-rate band of £325,000. If you leave a home to your children or grandchildren there is a further residence nil-rate band of up to £175,000, making £500,000. Anything left to a husband, wife or civil partner is exempt, and their unused allowances pass to the survivor, so a couple can often leave up to £1 million before any tax is due.
What rate is inheritance tax charged at?
40% on the part of the estate above the available allowances. If at least 10% of the estate above the nil-rate band is left to charity, the rate on the rest falls to 36%.
How are gifts treated?
Most gifts to individuals fall outside your estate if you live for seven years after making them. If you die within seven years, the gifts use up your nil-rate band first. Where the gifts themselves exceed the nil-rate band, tax on them reduces on a sliding scale once three years have passed. Some gifts are exempt straight away, including £3,000 a year in total, small gifts of up to £250 per person, wedding gifts within set limits and regular gifts from surplus income.
Does my pension count towards inheritance tax?
For deaths before 6 April 2027, most unused pension funds sit outside the estate. From that date most unused pension funds and death benefits are counted, which will bring many more estates into inheritance tax. Pensions left to a spouse or civil partner remain exempt, and death-in-service benefits are excluded. Our pensions in your estate calculator shows the difference.
What happens above £2 million?
The residence nil-rate band is withdrawn by £1 for every £2 that the estate exceeds £2 million. For a couple with both sets of allowances it disappears completely at £2.7 million. Lifetime gifts and how assets are held between you can affect which side of that line an estate falls.
Is inheritance tax different in Scotland, Wales or Northern Ireland?
No. The tax, the allowances and the rates are the same across the UK. What differs in Scotland is succession law: children and a spouse have legal rights to part of the moveable estate whatever the will says, which can affect how an estate is planned.
Can inheritance tax be reduced?
Often, yes. The usual tools are lifetime gifts, making full use of both partners' allowances, trusts, life cover written in trust to pay the bill, reliefs for business and agricultural property, and the order in which pensions and other savings are spent. Which of them suit you depends on your circumstances, and that is the conversation to have with a regulated adviser.
Numbers are a start. A plan is better.
Book a complimentary video consultation and go through your results with an FCA-regulated adviser from our network. No obligation.