How to use the Inheritance Tax Calculator
- 1 Enter the estate value after debts and funeral costs.
- 2 Enter the value of a home left to direct descendants, if any.
- 3 Enter gifts to a spouse or civil partner and to charity.
- 4 Enter any transferred allowances as a percentage, then read the tax due.
Worked example
A £1,200,000 estate with a £500,000 home left to the children and no transfers. The tax-free threshold is £325,000 + £175,000 = £500,000. Tax is charged on the remaining £700,000 at 40%, which is £280,000. With full transfers from a late spouse, the threshold becomes £1,000,000 and the tax falls to £80,000.
Features
Both allowances
£325,000 nil-rate band and up to £175,000 residence nil-rate band for a home passed to children or grandchildren.
Transfers between spouses
Add up to 100% of unused allowances from a late spouse or civil partner.
Charity rate
The rate falls to 36% when at least 10% of the net estate goes to charity.
When to use it
Estate planning
See roughly how much tax your family might face.
After a death
Get an early estimate before the executors prepare the IHT forms.
Gifting decisions
See how leaving more to charity or a spouse changes the bill.
Married couples
Check how transferring unused allowances can double the threshold to £1 million.
Frequently asked questions
What is the inheritance tax threshold?
The nil-rate band is £325,000. A further residence nil-rate band of up to £175,000 applies when a home goes to direct descendants, giving up to £500,000 per person.
What is the rate?
40% on the value above the threshold, or 36% if at least 10% of the net estate is left to charity.
Can a couple pass on £1 million tax-free?
Often yes. Unused nil-rate and residence bands of the first spouse to die can be transferred, giving up to £1 million on the second death.
What is the residence nil-rate band taper?
For estates worth more than £2 million, the residence band is reduced by £1 for every £2 over £2 million.
Are gifts during life taxed?
Gifts made within 7 years of death may be taxed, with taper relief after 3 years. Some gifts, such as the £3,000 annual exemption, are exempt. This calculator covers the estate at death.
Are spouse gifts taxed?
No. Gifts to a UK-domiciled spouse or civil partner are exempt.
When must inheritance tax be paid?
By the end of the sixth month after the death. Interest is charged after that, although tax on some property can be paid in instalments over 10 years.
Do pensions count towards the estate?
Under current plans, most unused pension funds and death benefits are due to be included in the estate for inheritance tax from April 2027. Check the latest GOV.UK guidance for deaths after that date.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated