Estimate the UK Inheritance Tax owed on an estate based on its value, debts, the nil-rate band, and tax rate.
2025/26 nil-rate band (example)
An Inheritance Tax (IHT) calculator estimates how much Inheritance Tax might be owed on an estate after someone dies, based on the gross value of the estate, any debts and deductions, the available tax-free threshold (nil-rate band), and the applicable tax rate. This gives an indication of the tax that might be due before the remaining estate is distributed to beneficiaries.
Inheritance Tax is calculated on the portion of the net estate (gross estate minus debts and deductions) that exceeds the available tax-free threshold (nil-rate band). The tax rate is then applied only to this excess amount — not to the whole estate.
Formula: Net Estate = Gross Estate Value − Debts, Expenses & Deductions. Taxable Estate = max(0, Net Estate − Nil-Rate Band Threshold). Inheritance Tax = Taxable Estate × Tax Rate. Net to Heirs = Net Estate − Inheritance Tax.
Example: For a £500,000 gross estate with £10,000 in debts and expenses, the net estate is £490,000. With a £325,000 nil-rate band threshold (example — your actual threshold may be higher with transferable or residence nil-rate bands), the taxable estate is £165,000. At the standard 40% rate, the Inheritance Tax is £66,000, leaving £424,000 to pass to heirs. (Note: all figures in this example are for illustration purposes only and do not represent any specific estate's tax position.)
The standard Inheritance Tax nil-rate band is £325,000 per person (example figure — check current thresholds), below which no IHT is due. There's also a residence nil-rate band (an additional allowance, commonly £175,000) available when a main residence is passed to direct descendants (children or grandchildren), which can increase the effective threshold to £500,000 for an individual. Any unused nil-rate band and residence nil-rate band can typically be transferred to a surviving spouse or civil partner, potentially doubling these allowances to up to £1 million for a couple in the right circumstances. Transfers between spouses or civil partners, and gifts to UK charities, are generally exempt from Inheritance Tax regardless of amount. Gifts made during a person's lifetime may also be brought back into the estate for IHT purposes if made within 7 years of death, with "taper relief" potentially reducing the tax on gifts made 3-7 years before death. Given the complexity of nil-rate bands, residence nil-rate bands, transferable allowances, and gifting rules, this calculator provides only a simplified estimate — proper estate planning typically benefits from professional advice.
The nil-rate band is the amount of an estate that can be passed on free of Inheritance Tax — currently £325,000 per person (example figure, check current thresholds). Inheritance Tax is only charged on the value of the estate above this threshold, at the applicable rate.
The residence nil-rate band is an additional tax-free allowance (commonly £175,000) available when a main residence is left to direct descendants, such as children or grandchildren. Combined with the standard nil-rate band, this can increase an individual's tax-free threshold to as much as £500,000 in the right circumstances.
Yes. Any unused nil-rate band (and residence nil-rate band) from a deceased spouse or civil partner can generally be transferred to the surviving spouse or civil partner's estate, potentially doubling the available tax-free threshold for the second death — up to £1 million combined in the right circumstances.
Generally, no. Transfers to a spouse or civil partner (domiciled in the UK), and gifts to UK-registered charities, are typically exempt from Inheritance Tax regardless of the amount, and don't use up the nil-rate band.
Potentially, yes. Gifts made within 7 years of death may be brought back into the estate for Inheritance Tax purposes. "Taper relief" can reduce the tax rate on gifts made between 3 and 7 years before death. Gifts made more than 7 years before death are generally outside the estate for IHT purposes.
This calculator provides a simplified estimate based on the figures you enter. Actual Inheritance Tax depends on many factors not captured here, including transferable nil-rate bands, the residence nil-rate band and its tapering for larger estates, lifetime gifts, trusts, business or agricultural property relief, and other reliefs. Professional advice is recommended for actual estate planning.
Disclaimer: The information and figures provided on this page are for educational and illustrative purposes only and do not constitute legal, tax, or financial advice, and should not be relied upon for actual estate planning or tax filings. Inheritance Tax thresholds, rates, reliefs (including the residence nil-rate band, transferable allowances, and gifting rules), and exemptions are complex, subject to change, and depend on individual circumstances. Always consult a qualified solicitor, tax adviser, or HMRC directly for guidance specific to an estate.