Inheritance tax calculator
Add up an estate the way HMRC does: assets less debts and funeral costs, the nil-rate and residence bands, gifts made in the last seven years, and what goes to a spouse or charity. See the inheritance tax due, the effective rate and what the beneficiaries receive.
Rules for tax year 2026/27Checked Free, no sign-up
Example figures
Change any to use yours
Inheritance tax due
£140,000
An effective rate of 17.3% on the estate. Children and other beneficiaries receive £670,000 after tax.
- Estate after debts
- £810,000
- Thresholds available
- £460,000
- Taxable amount
- £350,000
- Effective rate
- 17.3%
- Tax on gifts
- £0
£285,000 nil-rate, £175,000 residence
Of the estate; 40% above the thresholds
On £40,000 of gifts, paid by the recipients
Where the estate goes
- Children and others, after tax£670,00083%
- Inheritance tax£140,00017%
Amount | |
|---|---|
| Assets | £820,000 |
| Of which unused pensions | £100,000 |
| Debts, mortgage and funeral costs | −£10,000 |
| Estate after debts | £810,000 |
| Chargeable estate | £810,000 |
| Residence nil-rate band | −£175,000 |
| Nil-rate band used by gifts | £40,000 |
| Nil-rate band left for the estate | −£285,000 |
| Taxed at 40% | £350,000 |
| Inheritance tax on the estate | £140,000 |
Gift | In the band | Over it | Taper relief | Tax |
|---|---|---|---|---|
| £40,000, 4 to 5 years ago | £40,000 | £0 | 40% | £0 |
Unused pensions are counted in the estate, as they are for deaths from 6 April 2027. For the pension on its own and the income tax on it, see the inheritance tax on pensions calculator.
An illustration under current rules, not advice. Values are at the date of death; business and agricultural relief, trusts and the downsizing addition aren't included.
See your whole estate in one place: home, pensions, savings and the debts against them, kept current.
Start with LiteHow this works
The calculator values the estate at death: the home, savings, investments and other assets, less the mortgage, other debts and reasonable funeral costs. For deaths from 6 April 2027 it adds unused pension funds. Anything left to a spouse or civil partner, or to charity, comes off as exempt; the rest is the chargeable estate.
Gifts made in the last seven years are set against the nil-rate band of £325,000 first. Whatever is left of it, plus the residence nil-rate band of £175,000 when the home goes to children or grandchildren, comes off the chargeable estate, and the remainder is taxed at 40%. The residence band is capped at the home's value after its mortgage and at what the descendants receive, and it falls by £1 for every £2 the estate is worth over £2M. A widow or widower adds the share of each band their late spouse left unused, up to 100%.
Each gift is taxed only on the part the nil-rate band doesn't cover, oldest gift first, at 40% reduced by taper relief for gifts made three to seven years before death. The person who received the gift pays that tax, so the calculator shows it apart from the estate's bill.
When the gift to charity is at least 10% of the baseline amount, the estate is taxed at 36% instead of 40%. The baseline is the estate after debts and other exemptions, less the nil-rate band left after gifts, with the charity gift added back. The residence band isn't taken off it.
The calculator treats the spouse and charity shares as shares of the whole net estate, and assumes the home goes to direct descendants only from what's left after them. It leaves out business and agricultural property relief, the downsizing addition to the residence band, gifts with reservation, trusts, foreign assets and quick succession relief, and it assumes the gifts you enter are already net of exemptions. It is an illustration, not advice on any estate.
Data sources
- GOV.UK: How Inheritance Tax works: thresholds, rules and allowances
- HMRC: Work out and apply the residence nil rate band
- HMRC: Work out Inheritance Tax due on gifts
- HMRC: Transferring unused residence nil rate band
- HMRC Inheritance Tax Manual: the reduced rate and the baseline amount
- HMRC: Changes to agricultural property relief and business property relief
- HMRC: Inheritance Tax on unused pension funds and death benefits
The nil-rate bands
The nil-rate band is £325,000. It has been frozen since 2009 and is set to stay there until April 2031, so as house prices and savings rise, more estates go over it. Gifts in the last seven years use it first, before the estate.
The residence nil-rate band adds up to £175,000 when a home the person lived in goes to children, grandchildren or their spouses, including step, adopted and foster children. It is capped at the home's value after its mortgage, and it falls by £1 for every £2 the estate is worth over £2M, so it is gone entirely at £2M plus twice the band. A home that goes to nieces, nephews, siblings or friends doesn't qualify.
When someone dies leaving their band unused, usually because everything went to their spouse, the survivor's estate can claim the unused share of both bands. With full transfers that is £1M between them before tax. The transfer is claimed on the second death, and the residence part still needs a home going to direct descendants then.
Gifts and the seven-year rule
A gift to a person is a potentially exempt transfer: it drops out of the estate if the giver lives 7 more years. If they don't, it is added back on death, oldest first, and set against the nil-rate band. Tax on the part over the band is charged on a sliding scale:
- Less than 3 years before death: 40%
- 3 to 4 years: 32%
- 4 to 5 years: 24%
- 5 to 6 years: 16%
- 6 to 7 years: 8%
- 7 years or more: nothing
The relief reduces the tax on the gift, not the gift itself, so it only matters once gifts go over the nil-rate band. A gift inside the band costs nothing itself, but leaves less of the band for the estate, so the estate's bill can rise by up to 40% of it.
Exempt from the start: the first £3,000 of gifts each tax year (plus last year's if unused), small gifts of up to £250 a person, wedding gifts within set limits, regular gifts out of surplus income, and anything to a spouse, civil partner or charity. Enter gifts in the calculator after these.
Pensions from April 2027
For deaths on or after 6 April 2027, unused pension funds and most death benefits join the estate. They share the nil-rate bands with everything else and count towards the £2M test for the residence band, so an estate under it without the pension may lose some or all of that band once the pension is added.
Switch the date of death above to see the difference. For the pension on its own, before and after the change, and the income tax beneficiaries pay on it after 75, try the inheritance tax on pensions calculator.
Questions
How much inheritance tax will my estate pay?
Inheritance tax is 40% of the estate above the thresholds. Everyone has a nil-rate band of £325,000, and a residence nil-rate band of £175,000 when a home goes to children or grandchildren, so a single person can leave up to £500,000 before tax is due. Married couples and civil partners can pass unused bands to each other, which takes a couple to £1M. Everything left to a spouse or civil partner, or to charity, is exempt. The thresholds are frozen until April 2031.
Who pays inheritance tax, and when?
The executors or administrators pay it from the estate, usually before the assets are passed on. It is due by the end of the sixth month after the death, and HMRC charges interest after that. Tax on gifts made in the seven years before death is paid by the people who received them, and by the estate if they don't.
Is there inheritance tax between spouses?
No. Anything left to a husband, wife or civil partner is exempt, with a limit where they aren't a long-term UK resident. Nothing is taxed on the first death and the unused share of both bands passes to the survivor, who can add it to their own on the second death. Unmarried partners don't get the exemption or the transfer.
Which gifts are free of inheritance tax?
Gifts to a spouse, civil partner or charity are exempt. So is the first £3,000 of gifts each tax year, with one unused year carried forward, small gifts of up to £250 to any one person, wedding gifts up to set limits, and regular gifts out of surplus income that leave the giver's standard of living unchanged. Other gifts to people are free of tax if the giver lives 7 more years.
How does leaving money to charity reduce inheritance tax?
Gifts to charity are exempt, so they come off the estate before tax. If they come to at least 10% of the baseline amount, roughly the estate after the nil-rate band, the rest of the estate is taxed at 36% instead of 40%. The calculator tells you how much would reach that line when the share you enter falls short.
What about business and agricultural property?
From 6 April 2026, business and agricultural property relief give 100% relief on the first £2.5M of qualifying property combined, and 50% relief above that, an effective rate of 20%. Unused allowance can pass to a surviving spouse or civil partner, so a couple can have up to £5M. Shares not listed on a recognised stock exchange, such as AIM shares, get 50% relief whatever their value. Whether property qualifies depends on detailed conditions, so this calculator leaves the reliefs out.
Are pensions included in the estate?
For deaths before 6 April 2027 most defined contribution pensions sit outside the estate. For deaths on or after that date unused pension funds and most death benefits are added to it, share its nil-rate bands and count towards the £2M residence band taper. Pensions left to a spouse or civil partner, or to charity, stay exempt, and death-in-service benefits stay outside.
Keep the whole estate in view in Aureli
Your home, pensions, ISAs, savings and the debts against them, added up and kept current. The figure any conversation about an estate starts from.
Read-only bank access · Encrypted in transit and at rest · Revoke access any time