Inheritance Tax calculator

Each person has a nil-rate band of £325,000, frozen until April 2030. A residence nil-rate band of up to £175,000 can apply on top when a main home passes to direct descendants. Because unused allowances pass between spouses and civil partners, a couple can often pass on up to £1,000,000 in total. Anything above the available thresholds is generally taxed at 40%.

You add up the value of everything in the estate (property, savings, investments and, from 6 April 2027, most unused pensions), subtract debts and the available nil-rate bands, and 40% is charged on what remains. This calculator applies the standard 2025/26 allowances to give an indicative figure; your actual position depends on gifts, trusts, reliefs and your full circumstances.

The nil-rate band is £325,000 per person and the residence nil-rate band is up to £175,000 per person where a main home passes to children or grandchildren. Both are frozen until April 2030. The residence nil-rate band tapers away by £1 for every £2 an estate exceeds £2,000,000.

No. Transfers between UK-domiciled spouses or civil partners are exempt, and any unused nil-rate band passes to the survivor. Inheritance Tax typically becomes relevant on the second death, which is the scenario this calculator's 'married or civil partnership' option models.

Until now most unused pension funds have usually sat outside the estate for Inheritance Tax. From 6 April 2027 they are expected to be included. Toggling pensions on in the calculator shows how much that change could add to a potential bill — for many families it is the single biggest reason to review their plan now.

Common routes include using both nil-rate bands, lifetime gifting within the 7-year rule and the £3,000 annual exemption, gifts out of surplus income, and trusts where they genuinely fit. What works is plan-dependent. A fixed-fee review with our team maps your position and the steps worth taking — there is no obligation.

Anything left to charity is exempt from Inheritance Tax — and if 10% or more of the estate goes to charity, the rate charged on the rest falls from 40% to 36%. The statutory 10% test is applied to a 'baseline amount' rather than a simple percentage of the estate, so the calculator's charity option is a simplified version; our team confirms eligibility as part of a review.

Yes. Any unused nil-rate band (up to £325,000) and unused residence nil-rate band (up to £175,000) from a late spouse or civil partner can be transferred to the survivor's estate. The transfer is not automatic — the executors must claim it during probate. If you have remarried, your current spouse's position and the transferred allowances from the late spouse can both be relevant.

Yes. Outstanding debts — such as a mortgage, loans, credit cards and reasonable funeral costs — are deducted from the estate before Inheritance Tax is worked out, so tax only applies to the net estate. The calculator's 'debts and liabilities' option models this deduction.