UK Inheritance Tax Calculator
Inheritance Tax is usually charged at 40% on the part of an estate above the nil-rate band of £325,000 when someone dies. An extra residence nil-rate band of up to £175,000 applies when a main home passes to direct descendants, and leaving at least 10% of the taxable estate to charity reduces the rate to 36%.
Enter the estate value, any debts and charitable gifts to estimate the bill.
How the calculation works
We believe numbers should be transparent. Here is the formula behind this calculator.
Worked example
Worked example: a £500,000 estate in 2026/27
Examples at common levels
See how the numbers change at typical input levels, using the updated for tax year 2026/27 rates.
| Scenario | Inheritance Tax due | Passes to beneficiaries | Net estate (after debts) | Nil-rate band | Residence nil-rate band applied | Taxable estate | Effective tax rate |
|---|---|---|---|---|---|---|---|
| £500,000 estate, home to children Residence band reduces the bill | £0.00 | £500,000.00 | £500,000.00 | £325,000.00 | £175,000.00 | £0.00 | 0.0% |
| £400,000 estate, no home Only the £325,000 nil-rate band | £30,000.00 | £370,000.00 | £400,000.00 | £325,000.00 | £0.00 | £75,000.00 | 7.5% |
| £2.5m estate (band tapered) Residence band tapers above £2m | £870,000.00 | £1,630,000.00 | £2,500,000.00 | £325,000.00 | £0.00 | £2,175,000.00 | 34.8% |
| £900,000 estate, 10% to charity Reduced 36% rate | £207,000.00 | £693,000.00 | £900,000.00 | £325,000.00 | £0.00 | £575,000.00 | 23.0% |
Important assumptions
- Uses the £325,000 nil-rate band and up to £175,000 residence nil-rate band.
- The residence band tapers by £1 for every £2 of estate over £2 million.
- The 36% reduced rate applies when at least 10% of the net estate is left to charity.
- Assumes no unused bands are transferred from a spouse or civil partner — always confirm with a professional.
Rates & official sources
Every calculation is based on the official rates and rules published by GOV.UK and HMRC.
Frequently asked questions
How much Inheritance Tax will my estate pay?
The first £325,000 is tax-free. If your main home passes to direct descendants, an extra £175,000 is usually tax-free too. The remainder is taxed at 40%, or 36% if you leave at least 10% of the taxable estate to charity.
Do spouses and civil partners pay Inheritance Tax?
Assets passed to a spouse or civil partner are exempt, and any unused nil-rate band is transferred to them. Married couples can effectively shelter £650,000 (plus £350,000 residence band) from tax.
When is the residence nil-rate band reduced?
It is tapered by £1 for every £2 of the estate above £2 million. Above roughly £2.35 million the residence band is fully gone (with the £175,000 band).
Do I need to complete a full IHT return?
This calculator is an estimate for planning. Executors normally complete an Inheritance Tax account (form IHT400) as part of probate, so estate values are official at that point.
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Read the guideThese calculations are estimates for guidance only and are not professional financial, tax or legal advice. UK rates and rules change, so always verify important figures with official GOV.UK / HMRC information or speak to a qualified professional. See our full disclaimer.