UK Inheritance Tax Calculator
Estimate inheritance tax on a UK estate — the estate value measured against nil-rate bands, computed with HMRC rules.
UK Inheritance Tax Calculator
2026–27 HMRC thresholds · IHT on a deceased estate
Estate Summary
SINGLEYour inheritance tax summary
A plain-English read of the IHT on this estate — using current HMRC thresholds, the residence nil-rate band where eligible, and the reduced 36% rate for estates leaving 10% or more to charity.
IHT across different estate values
Estimated inheritance tax at different estate values, using your current allowance settings. Larger estates over GBP 2,000,000 also begin to lose the residence nil-rate band through tapering, lifting the effective rate.
| Estate Value | Tax-Free Threshold | Estimated IHT | Effective Rate |
|---|
Your tax-free allowances
The nil-rate band and residence nil-rate band reduce the value of the estate exposed to the 40% rate. Married couples and civil partners can transfer unused bands. Source: HMRC — Passing on a home ↗
| Allowance | Maximum | Available | Status |
|---|---|---|---|
| Nil-rate band (NRB) | GBP 325,000 | GBP 325,000 | ✓ Fully available |
| Residence nil-rate band (RNRB) | GBP 175,000 | GBP 175,000 | ✓ Fully available |
| Total tax-free threshold | GBP 500,000 | GBP 500,000 | ◀ Applied to estate |
Allowances, gifts & the 7-year rule
Your tax-free allowances shield part of the estate from the 40% rate. Lifetime gifts can also fall outside the estate under the 7-year rule. HMRC — Rules on giving gifts ↗
Gifts made more than 7 years before death are exempt. For gifts above the nil-rate band made 3–7 years before death, taper relief reduces the tax charged on the gift (not the gift value).
| Years Before Death | Tax Rate on Gift | Taper Relief |
|---|---|---|
| Less than 3 years | 40% | 0% |
| 3 to 4 years | 32% | 20% |
| 4 to 5 years | 24% | 40% |
| 5 to 6 years | 16% | 60% |
| 6 to 7 years | 8% | 80% |
| 7 years or more | 0% | Exempt |
UK Inheritance Tax Rates & Allowances
A reference guide to HMRC's inheritance tax thresholds, rates, exemptions and reliefs — with the full rate table and worked examples. All figures verified against official gov.uk guidance.
The UK Inheritance Tax Landscape
Inheritance tax is charged on the value of a person's estate when they die — property, savings, investments and possessions, minus debts. The standard rate is 40%, but it only applies to the part of the estate above the available tax-free threshold. Most estates pay nothing: HMRC data for 2022–23 shows around 4.62% of deaths resulted in an IHT charge, covering roughly 31,500 estates.
Because the nil-rate band has been frozen at GBP 325,000 since 2009 and the residence nil-rate band at GBP 175,000 since 2020 — now frozen until April 2031 — rising property and asset values are gradually drawing more estates into the net. HMRC inheritance tax receipts reached a record GBP 8.2 billion in 2024–25, up from GBP 5.3 billion in 2020–21.
Inheritance Tax Rate Table 2026–27
The complete set of HMRC inheritance tax rates, thresholds and bands for the 2026–27 tax year. All figures are frozen until April 2031.
Rates & Thresholds
| Item | 2026–27 Figure | Applies To |
|---|---|---|
| Standard IHT rate | 40% | Estate value above the tax-free threshold (on death) |
| Reduced charity rate | 36% | Where 10%+ of the net estate is left to charity |
| Lifetime / CLT rate | 20% | Chargeable lifetime transfers into certain trusts above the NRB |
| Nil-rate band (NRB) | GBP 325,000 | Every estate — tax-free |
| Residence nil-rate band (RNRB) | GBP 175,000 | Main home passing to direct descendants |
| RNRB taper threshold | GBP 2,000,000 | RNRB reduces by GBP 1 per GBP 2 of estate above this |
| Combined threshold — single | GBP 500,000 | NRB + RNRB for one person (with qualifying home) |
| Combined threshold — couple | GBP 1,000,000 | Both bands transferred between spouses / civil partners |
Residence Nil-Rate Band Taper
| Estate Value | RNRB Available (Single) | RNRB Lost |
|---|---|---|
| Up to GBP 2,000,000 | GBP 175,000 | GBP 0 |
| GBP 2,100,000 | GBP 125,000 | GBP 50,000 |
| GBP 2,200,000 | GBP 75,000 | GBP 100,000 |
| GBP 2,300,000 | GBP 25,000 | GBP 150,000 |
| GBP 2,350,000+ | GBP 0 | Fully tapered |
Exemptions & Reliefs
How transfers, gifts and certain assets can pass free of inheritance tax — and the limits that apply.
Main Exemptions
| Exemption | Limit | Notes |
|---|---|---|
| Spouse / civil partner | Unlimited | Transfers between UK-domiciled spouses or civil partners are fully exempt |
| Gifts to UK charities | Unlimited | Exempt; 10%+ of net estate also cuts the rate to 36% |
| Annual gift exemption | GBP 3,000 / yr | Per tax year; one year's unused allowance can be carried forward |
| Small gifts | GBP 250 / person | Per recipient per tax year (cannot combine with the annual exemption) |
| Wedding gifts — to a child | GBP 5,000 | Per wedding / civil partnership |
| Wedding gifts — to a grandchild | GBP 2,500 | Per wedding / civil partnership |
| Wedding gifts — to anyone else | GBP 1,000 | Per wedding / civil partnership |
| Regular gifts from income | Unlimited | Must be from surplus income and not affect your standard of living |
The 7-Year Rule & Taper Relief
| Years Between Gift & Death | Rate on Gift | Taper Relief |
|---|---|---|
| Less than 3 years | 40% | 0% |
| 3 to 4 years | 32% | 20% |
| 4 to 5 years | 24% | 40% |
| 5 to 6 years | 16% | 60% |
| 6 to 7 years | 8% | 80% |
| 7 years or more | 0% | Fully exempt |
Business & Agricultural Relief
| Relief | Rate | From 6 April 2026 |
|---|---|---|
| Business / Agricultural Property Relief | 100% / 50% | 100% relief capped at GBP 1,000,000 combined per person; 50% relief above the cap (effective 20% charge) |
| GBP 1m allowance transfer | Transferable | Between spouses / civil partners — up to GBP 2,000,000 of qualifying assets at 100% |
Worked Examples
Illustrative scenarios showing how the thresholds and reliefs apply in practice. Figures are examples only and do not reflect any individual's circumstances.
UK Inheritance Tax News & Updates
Recent HMRC, HM Treasury and OBR announcements affecting Inheritance Tax — sourced from official government channels.
Autumn Budget 2025: Nil-Rate Bands Frozen to April 2031
The November 2025 Budget extended the freeze on the Inheritance Tax nil-rate band and residence nil-rate band, keeping both thresholds unchanged until April 2031.
Key Changes
- Nil-rate band held at GBP 325,000 per person through to April 2031
- Residence nil-rate band held at GBP 175,000 per person over the same period
- The RNRB GBP 2 million taper threshold also remains unchanged
- Extends a freeze that has applied to the nil-rate band since 2009
Impact
As property and asset values rise against frozen thresholds, more estates are expected to become liable for Inheritance Tax — a "fiscal drag" effect.
What to Watch
Estates close to the thresholds may move above them over time. Reviewing valuations against the frozen bands is increasingly relevant.
Unused Pension Funds to Fall Within Inheritance Tax
From 6 April 2027, most unused pension funds and death benefits will be included within the value of a person's estate for Inheritance Tax purposes.
Key Changes
- Most unused pension funds become part of the estate for IHT from 6 April 2027
- Personal representatives will generally be responsible for reporting and paying any IHT due on pensions
- Death-in-service benefits from registered schemes are expected to be excluded
- Spouse and civil partner exemptions continue to apply to amounts passing to them
Impact
Pensions have generally sat outside the estate for IHT. Bringing them in is a significant change to estate planning for many households.
What to Watch
HMRC has published the response to consultation and draft legislation. Final rules and scheme processes are being confirmed ahead of April 2027.
Agricultural & Business Relief Capped at GBP 1 Million
From 6 April 2026, 100% Agricultural Property Relief and Business Property Relief will be limited to a combined GBP 1 million allowance per person, with relief above that level reduced to 50%.
Key Changes
- 100% APR and BPR combined capped at GBP 1 million per person
- Qualifying assets above the GBP 1 million allowance receive 50% relief (an effective 20% IHT rate)
- The GBP 1 million allowance is transferable between spouses and civil partners (confirmed November 2025)
- The allowance is to be frozen at GBP 1 million until April 2031
Impact
Owners of farms and trading businesses above the allowance may face an IHT charge on the excess for the first time in many years.
What to Watch
Affected estates should review how the GBP 1 million allowance applies across qualifying agricultural and business assets.
Inheritance Tax — Frequently Asked Questions
Common questions about how Inheritance Tax works in the UK — the basics, allowances, gifts, and special cases — verified against official HMRC and gov.uk guidance.
Inheritance Tax is generally paid from the estate of the person who has died — the executor or personal representative arranges payment before assets are distributed. It is charged on the value of the estate above the available tax-free thresholds. According to HMRC, only an estimated 4–5% of estates pay any Inheritance Tax.
gov.uk Inheritance TaxThe standard rate is 40%, charged only on the part of the estate above the tax-free thresholds. A reduced rate of 36% applies where 10% or more of the net estate is left to charity. A lower 20% lifetime rate can apply to certain chargeable transfers into trust.
gov.uk Inheritance Tax RatesThe nil-rate band (NRB) is the amount of an estate that is taxed at 0%. It is currently GBP 325,000 per person. Following the November 2025 Budget, the NRB is frozen at this level until April 2031. Anything above the available threshold may be taxed at 40%.
gov.uk Nil-Rate BandThere is normally no Inheritance Tax to pay if the value of the estate is below the available threshold, or if everything above the threshold is left to a spouse or civil partner, or to a qualifying charity or community amateur sports club. Transfers to a UK-domiciled (or long-term resident) spouse or civil partner are exempt without limit.
gov.uk Inheritance TaxInheritance Tax is generally due by the end of the sixth month after the person died. For example, if the death was in January, payment is due by 31 July. Interest is charged on amounts paid late. Tax on some assets, such as property, can be paid in instalments over up to 10 years, though interest may still apply.
gov.uk Paying Inheritance TaxThe residence nil-rate band is an additional threshold of up to GBP 175,000 per person that applies when a home (or share of one) is left to direct descendants — children, grandchildren, and their lineal relations. It is capped at the value of the property and, like the NRB, is frozen until April 2031.
gov.uk Residence Nil-Rate BandYes. When the first spouse or civil partner dies, any unused proportion of their nil-rate band and residence nil-rate band can transfer to the survivor. This means a couple can potentially pass on up to GBP 1 million tax-free where a home is left to direct descendants (2 × GBP 325,000 NRB + 2 × GBP 175,000 RNRB).
gov.uk Passing On a HomeThe residence nil-rate band is reduced for larger estates. For every GBP 2 the estate is worth above GBP 2 million, the RNRB is reduced by GBP 1. A single person's full RNRB is withdrawn entirely once the estate reaches GBP 2.35 million (or GBP 2.7 million where both partners' bands apply).
gov.uk RNRB TaperYes. Gifts to qualifying charities are themselves exempt from Inheritance Tax. In addition, if you leave 10% or more of the net estate to charity, the rate charged on the rest of the taxable estate falls from 40% to 36%. The "net estate" is the value after deducting the available nil-rate band and exemptions.
gov.uk Reduced Charity RateMost gifts you make to individuals are potentially exempt transfers (PETs). If you live for 7 years after making the gift, it is generally free from Inheritance Tax. If you die within 7 years, the gift is added back into the estate calculation and may be subject to tax, depending on its value and timing.
gov.uk GiftsTaper relief can reduce the tax due on a gift (not the value of the gift) where the gift was made 3 to 7 years before death and the total of such gifts exceeds the nil-rate band. The reduction in tax is staged:
- 3 to 4 years before death — tax reduced to 80%
- 4 to 5 years — 60%
- 5 to 6 years — 40%
- 6 to 7 years — 20%
- 7+ years — generally exempt
Taper relief only applies once gifts in the 7 years before death exceed the nil-rate band.
gov.uk Taper ReliefSeveral exemptions let you give without the 7-year rule applying:
- Annual exemption — up to GBP 3,000 per tax year, and any unused amount can carry forward one year (to a maximum of GBP 6,000)
- Small gifts — up to GBP 250 per person per year to any number of people
- Wedding gifts — up to GBP 5,000 to a child, GBP 2,500 to a grandchild, and GBP 1,000 to others
- Regular gifts from surplus income — exempt where they are part of normal expenditure and do not reduce your standard of living
Most unused pension funds have generally sat outside the estate for Inheritance Tax. This is changing: from 6 April 2027, most unused pension funds and death benefits will be brought within the estate for IHT, with personal representatives generally responsible for reporting and payment. Amounts passing to a spouse or civil partner remain exempt.
gov.uk IHT on PensionsAgricultural Property Relief (APR) and Business Property Relief (BPR) can reduce the value of qualifying farms and trading businesses for IHT. From 6 April 2026, 100% relief is limited to a combined GBP 1 million allowance per person, with qualifying assets above that level receiving 50% relief (an effective 20% rate). The GBP 1 million allowance is transferable between spouses and civil partners.
gov.uk Business ReliefFrom 6 April 2025, liability to Inheritance Tax on worldwide assets is based on long-term UK residence rather than the previous concept of domicile. In general, an individual UK-resident for at least 10 of the previous 20 tax years is within scope on their worldwide assets, with transitional "tail" provisions for some people after they leave the UK.
gov.uk Residence-Based IHTSeveral transfers are exempt regardless of value: gifts and bequests to a spouse or civil partner (where UK-domiciled or a long-term resident), to qualifying charities, to community amateur sports clubs, and to qualifying political parties. Gifts to most other individuals are potentially exempt and depend on the 7-year rule.
gov.uk ExemptionsImportant Disclaimer
For educational and informational purposes only. This calculator produces estimates of UK Inheritance Tax (IHT) based on the inputs provided and the 2026–27 thresholds and rates published by HMRC — a standard rate of 40% (or 36% where 10% or more of the net estate passes to charity), the nil-rate band of GBP 325,000 per person, and the residence nil-rate band of up to GBP 175,000 per person where a home is left to direct descendants. The calculator applies the residence nil-rate band taper for estates above GBP 2 million and simplifies many aspects of Inheritance Tax. It does not capture every asset type, relief, exemption, or individual circumstance.
Not a complete picture of Inheritance Tax. An estate's actual position depends on its specific assets and circumstances. Gifts made in the seven years before death, trusts, Business Property Relief and Agricultural Property Relief (with the combined GBP 1 million allowance applying from 6 April 2026), the treatment of pensions (most unused pension funds falling within the estate from 6 April 2027), and the residence-based scope of IHT from 6 April 2025 can all materially change the result. The transfer of unused nil-rate bands between spouses and civil partners is reflected only in a simplified way.
No warranty of accuracy. While Money Snap takes reasonable care to source figures from official authorities (HMRC, HM Treasury, gov.uk), this calculator is provided "as is" without any express or implied warranty as to accuracy, completeness, timeliness, or fitness for any particular purpose. Tax thresholds, rates, reliefs, and rules change — figures shown may be out of date, and individual circumstances not captured by the inputs may materially affect the actual Inheritance Tax position.
Not financial, tax, or legal advice. Information provided is general in nature only and does not take into account your personal objectives, financial situation, or needs. Results do not constitute financial, tax, or legal advice, and use of this calculator does not create an advisory relationship. Before acting on any figure shown, obtain personal advice from a qualified professional — such as a solicitor, chartered tax adviser, or accountant — or refer to HMRC and gov.uk directly.
Limitation of liability. To the maximum extent permitted by law, Money Snap accepts no liability for any loss, damage, cost, or expense — direct or indirect — arising from reliance on this calculator or the information it produces. Users are responsible for verifying all figures with the relevant authority before relying on them. Use of this calculator is subject to our Terms of Use.