Inheritance Tax calculator
A quick estimate of Inheritance Tax on an estate, including the home allowance, a late spouse's unused allowance and gifts to charity.
Your result appears here as you type.
A rough estimate. A real estate needs valuations and the IHT400 forms, and many estates use a solicitor.
How Inheritance Tax is worked out
The estate is valued on the date of death and debts and funeral costs are taken off. Anything left to a spouse, civil partner or charity is exempt. The first £325,000 of what's left is taxed at 0%, and if a home goes to children, stepchildren or grandchildren the residence nil-rate band adds up to £175,000 more. Everything above that is taxed at 40%.
| Allowance | 2026/27 |
|---|---|
| Nil-rate band | £325,000 |
| Residence nil-rate band | £175,000 |
| Residence band taper starts | £2,000,000 |
| Standard rate | 40% |
| Rate if 10% or more goes to charity | 36% |
How this is calculated
The calculator takes off debts, adds any transferred allowance from a late spouse, and reduces the nil-rate band by gifts made in the last 7 years. The residence band is capped at the value of the home and tapered if the net estate is over £2 million. Charity gifts come off the taxable amount, and the 36% rate applies if they're at least 10% of the estate after the nil-rate band. It doesn't cover business or agricultural relief, trusts, foreign assets or quick succession relief.
Worked example: a widowed parent's estate
Margaret's estate is worth £750,000, including a house worth £350,000 left to her two children. Debts and the funeral come to £10,000. Her late husband left everything to someone else, so nothing transfers.
- Net estate: £740,000
- Nil-rate band £325,000 plus residence band £175,000 = £500,000
- Taxable: £240,000 at 40%
Inheritance Tax: £96,000. If her husband had left everything to her and died after April 2017, her estate would have £1 million of allowances and no tax to pay.
Questions people ask
What is the Inheritance Tax threshold in 2026/27?
The nil-rate band is £325,000. If you leave your home to children or grandchildren you can also use the residence nil-rate band of up to £175,000, giving up to £500,000. Both thresholds are frozen and are not due to rise for several years.
Can a married couple pass on £1 million tax-free?
Often, yes. Anything left to a spouse or civil partner is exempt, and the unused nil-rate band and residence nil-rate band pass to the survivor. On the second death the estate can have up to £650,000 plus £350,000, as long as the home goes to direct descendants and the estate is under £2 million.
What happens to the residence nil-rate band over £2 million?
It’s reduced by £1 for every £2 the estate is worth over £2 million. A single person’s £175,000 is gone at £2.35 million.
Will pensions count for Inheritance Tax?
From 6 April 2027 most unused pension funds and death benefits will be included in the estate for Inheritance Tax. Before that date most pensions are outside the estate. If a large pension is involved, take advice.
How does leaving money to charity reduce Inheritance Tax?
Gifts to charity are exempt. If you leave at least 10% of the baseline amount (broadly the estate after the nil-rate band) to charity, the rest of the taxable estate is charged at 36% instead of 40%.
Sources
- Inheritance Tax (GOV.UK)
- Inheritance Tax: passing on a home (GOV.UK)
- Inheritance Tax: gifts (GOV.UK)
Rates and review
Uses rates for the 2026/27 tax year. Figures last checked against the sources on 25 October 2026.
Written by author to be named. Reviewed by qualified reviewer to be named.
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