Inheritance Tax Calculator UK 2026/27

The standard nil-rate band is £325,000 per person. If you also leave your main home to direct descendants (children or grandchildren), you get an additional residence nil-rate band of £175,000 — bringing the total to £500,000. A surviving spouse or civil partner can inherit unused nil-rate band from their deceased partner, potentially doubling these thresholds to £650,000 NRB plus £350,000 RNRB = £1,000,000 before any IHT is due.

Inheritance tax is charged at 40% on the value of the estate above the nil-rate band. If 10% or more of the net estate is left to a qualifying charity, the rate on the remainder drops to 36%. Estates below the nil-rate band threshold pay no IHT at all. There is no IHT between spouses or civil partners — assets left to a spouse pass completely tax-free regardless of value.

The residence nil-rate band (RNRB) is an additional £175,000 allowance for 2026/27 that applies when you leave your main home to direct descendants — children, grandchildren, or step-children. It is tapered away for estates above £2,000,000: for every £2 above £2m, the RNRB reduces by £1. At £2,350,000 or more, the full £175,000 RNRB is lost. A surviving spouse can also inherit unused RNRB.

Gifts made in the 7 years before death are called potentially exempt transfers (PETs). They are exempt from IHT if you survive 7 years from the date of the gift. If you die within 7 years, the gifts reduce your nil-rate band available for the estate — and if total gifts exceed the nil-rate band, taper relief applies to reduce the IHT on the gift itself: 0% taper in years 0–3, 20% off in years 3–4, 40% in years 4–5, 60% in years 5–6, and 80% in years 6–7. The annual gift exemption of £3,000 per year is completely excluded.

No. Assets passed between UK-domiciled spouses or civil partners are fully exempt from inheritance tax, regardless of value. This is called the spousal exemption. Additionally, any unused nil-rate band from the first spouse to die transfers to the survivor automatically — meaning the survivor can have up to £650,000 NRB (two × £325,000) and up to £350,000 RNRB (two × £175,000) available, for a total of £1,000,000 before IHT applies.

If 10% or more of your net estate (estate value after debts and nil-rate band) is left to a qualifying UK charity, the IHT rate on the remainder drops from 40% to 36%. This reduced rate applies to the whole taxable estate, not just the non-charitable portion. In some cases, increasing a charitable donation to reach the 10% threshold can result in your beneficiaries receiving more overall, because the tax saving on the entire estate outweighs the extra donation.

Deductible liabilities include mortgages and secured loans on estate property, unsecured debts such as credit card balances and personal loans, outstanding bills and invoices, funeral expenses, and professional fees for administering the estate. Debts that are not deductible include liabilities created artificially to reduce IHT, debts where the estate did not receive full consideration, and debts that are not legally enforceable.

Inheritance tax must be paid within 6 months of the end of the month in which death occurred. After 6 months, HMRC charges interest on unpaid tax. The estate cannot usually be administered or assets distributed until IHT is paid and probate is granted — but IHT is due before probate, which creates a practical challenge. Property and certain other assets can be paid in 10 annual instalments rather than in full upfront.