UK Inheritance Tax Calculator 2025/26

Calculate your UK inheritance tax (IHT) liability instantly — free and private. Enter your estate value, property, gifts and allowances, and the calculator applies the nil-rate band, residence nil-rate band, spouse transfers, charity relief and the 7-year gift rule automatically.

Include property, savings, investments, life insurance payouts
Value of main residence in the estate
Passing property to direct descendants?
Children, grandchildren or their spouses — unlocks the £175,000 RNRB
Married or in a civil partnership?
Unlocks transferable nil-rate bands from deceased spouse
100% if spouse used none of their NRB
100% if spouse used none of their RNRB
Deducted from estate; may qualify for 36% rate
Potentially exempt transfers (PETs)
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What Is Inheritance Tax in the UK?

Inheritance tax (IHT) is a tax on the estate of someone who has died, charged at 40% on the value above the tax-free threshold. The standard nil-rate band (NRB) is £325,000 per person — it has been frozen at this level since 2009 and will remain so until at least April 2028 under the Finance Act 2021. Only around 4% of UK deaths each year result in an IHT charge, but when it does apply, the bills can be substantial. The executor of the estate is responsible for paying IHT to HMRC, usually within six months of the date of death. Assets passing to a spouse or civil partner are exempt from IHT, which is why proper estate planning can make a significant difference.

Last updated: April 2025. Based on HMRC rates for tax year 2025/26.

Nil-Rate Band and Residence Nil-Rate Band Explained

The nil-rate band (NRB) of £325,000 is the basic IHT-free allowance. In addition, the residence nil-rate band (RNRB) provides an extra £175,000 when a home is passed to direct descendants (children, grandchildren, or their spouses). Together, an individual can pass on up to £500,000 free of IHT.

For married couples and civil partners, any unused NRB and RNRB can be transferred to the surviving partner, potentially doubling the combined threshold to £1 million. However, the RNRB is tapered for estates worth more than £2 million — it reduces by £1 for every £2 over that limit, meaning the RNRB is fully lost when an estate reaches £2.35 million (or £2.7 million for a couple claiming both). The standard NRB is not subject to this taper.

How the 7-Year Gift Rule Works

Gifts made during your lifetime are known as potentially exempt transfers (PETs). If you survive at least 7 years after making a gift, it falls completely outside your estate for IHT purposes. However, if you die within 7 years, the gift is brought back into the estate calculation. Taper relief reduces the effective IHT rate on gifts made between 3 and 7 years before death: 3-4 years at 32%, 4-5 years at 24%, 5-6 years at 16%, and 6-7 years at 8%. Gifts within 3 years of death are taxed at the full 40% rate. Note that taper relief only applies when the total value of gifts exceeds the nil-rate band — it reduces the tax on the excess, not the value of the gift itself.

Strategies to Reduce Your IHT Bill

There are several legitimate ways to reduce or eliminate an IHT liability. Leaving at least 10% of your net estate to charity qualifies the remainder for a reduced IHT rate of 36% instead of 40%. The annual gift exemption allows you to give away £3,000 per tax year IHT-free, and unused allowance can be carried forward one year. Small gifts of up to £250 per person per year, wedding gifts (up to £5,000 from a parent), and regular gifts from surplus income are also exempt. Setting up trusts can help manage IHT exposure, though they have their own tax rules. Life insurance written in trust can provide a lump sum to cover the IHT bill without adding to the estate's value. Professional financial advice is recommended for estates approaching or exceeding the nil-rate band threshold.