Inheritance Tax Calculator
Estimate UK inheritance tax (IHT) on your estate. Includes nil-rate band, residence nil-rate band, spouse exemption, and charitable giving relief.
Inheritance Tax Calculator
Estimate UK inheritance tax with nil-rate bands, residence relief, and spouse exemption
Inheritance Tax Due
£0
Effective rate: 0.00% (at 40%)
Allowance Breakdown
| Nil-Rate Band | £325,000 |
| Residence Nil-Rate Band | £175,000 |
| Total Tax-Free Allowance | £500,000 |
Summary
Estate Value
£500,000
IHT Due
£0
Net Estate
£500,000
How to Use This Calculator
- Enter your total estate value – Include property, savings, investments, and possessions.
- Add your main residence value – This determines eligibility for the residence nil-rate band.
- Select applicable exemptions – Toggle spouse exemption, direct descendant relief, and transferred allowances.
- Include gifts and charity – Add gifts made in the last 7 years and any charitable bequests.
Understanding the Nil-Rate Bands
The nil-rate band (NRB) of £325,000 is the basic tax-free threshold. Everyone gets this allowance, regardless of their circumstances.
The residence nil-rate band (RNRB) adds up to £175,000 extra when you leave your home to direct descendants. Combined, a single person can pass on up to £500,000 tax-free.
Married couples and civil partners can transfer unused allowances, potentially creating a combined tax-free threshold of up to £1,000,000.
Frequently Asked Questions
What is the inheritance tax threshold in the UK?
The standard inheritance tax threshold (nil-rate band) is £325,000. Estates valued below this amount pay no inheritance tax. This threshold has been frozen since 2009 and is set to remain at £325,000 until at least April 2028.
What is the residence nil-rate band (RNRB)?
The residence nil-rate band is an additional £175,000 allowance available when you leave your main home to direct descendants (children, grandchildren, stepchildren). This brings the potential tax-free threshold to £500,000 per person. The RNRB is tapered for estates over £2 million, reducing by £1 for every £2 above this threshold.
How does the spouse exemption work?
Transfers between married couples and civil partners are completely exempt from inheritance tax, regardless of the amount. Additionally, any unused nil-rate band and residence nil-rate band can be transferred to the surviving spouse, potentially doubling the tax-free threshold to £1 million for couples.
Are gifts subject to inheritance tax?
Gifts made more than 7 years before death are completely exempt. Gifts made within 7 years may be taxed on a sliding scale (taper relief): 0–3 years = 40%, 3–4 years = 32%, 4–5 years = 24%, 5–6 years = 16%, 6–7 years = 8%. Small gifts up to £250 per person per year and the annual exemption of £3,000 are always exempt.
What is the inheritance tax rate?
The standard IHT rate is 40% on the value of the estate above the nil-rate band. A reduced rate of 36% applies if you leave at least 10% of the net estate to charity. This can be a tax-efficient way to reduce your IHT bill while supporting good causes.
How can I reduce my inheritance tax bill?
Key strategies include: making gifts during your lifetime (exempt after 7 years), leaving at least 10% to charity (reduces rate to 36%), using pension funds (usually outside the estate), setting up trusts, taking out life insurance written in trust to cover the IHT bill, and making use of business and agricultural property relief.
When is inheritance tax due?
IHT is normally due within 6 months of the end of the month in which the person died. If paid late, interest is charged. For property and certain assets, you can opt to pay in annual instalments over 10 years, though interest still applies on the outstanding balance.
Related Calculators
Found this calculator helpful?
Check out our other free calculators for everyday math problems.
View All Calculators