UK Inheritance Tax Calculator
Tax on an estate after the £325,000 and home allowances, plus gifts from the last 7 years.
How the tax on the estate is worked out
Gifts, oldest first
Rules used and official sources
- GOV.UK: Inheritance Tax
- GOV.UK: Inheritance Tax on gifts
- GOV.UK: Work out Inheritance Tax due on gifts
- GOV.UK: Work out and apply the residence nil rate band
- GOV.UK: Check if an estate qualifies for the residence nil rate band
- GOV.UK: Transferring unused residence nil rate band
- HMRC: Claim to transfer unused nil rate band (IHT402)
- HMRC Inheritance Tax Manual IHTM45009: the baseline amount ignores the residence nil rate band
- HMRC Inheritance Tax Manual IHTM45010: the 36% rate and the baseline amount
- HMRC: Inheritance Tax thresholds
- GOV.UK: Business Relief for Inheritance Tax
- GOV.UK: Agricultural Relief on Inheritance Tax
- HMRC: Inheritance Tax on unused pension funds and death benefits
Tax rules and rates change. This calculator follows the rules described on this page and may not cover every situation. Check the official source or a qualified tax professional before filing or invoicing.
About the UK Inheritance Tax Calculator
Inheritance Tax is charged at 40% on the part of an estate above the tax-free threshold. Everyone has a nil rate band of £325,000; leaving a home (or a share of it) to children or grandchildren adds a residence nil rate band of up to £175,000, which is reduced by £1 for every £2 the estate is worth over £2 million. Anything left to a spouse or civil partner or to charity is tax-free, a late spouse’s unused allowances can be added, and leaving at least 10% to charity lowers the rate to 36%.
Enter what the estate is worth, its debts and who inherits, and the calculator applies these rules step by step. Add gifts made in the 7 years before death to see the tax on them, with taper relief for gifts made 3 to 7 years before, and how much of the nil rate band they used. It runs entirely in your browser.
How to use it
- Enter the date of death (or today’s date to plan ahead), the home value with any mortgage, everything else the person owned, and other debts and funeral costs.
- Say whether the home goes to direct descendants, and enter anything left to a spouse or civil partner or to charity.
- If they apply, open Reliefs and allowances for Business or Agricultural Relief and a late spouse’s unused allowances, and Gifts for gifts made in the 7 years before death.
- Read the tax on the estate and on gifts, the table of every step and the notes. Copy the summary or download the CSV.
Examples
40% of £175,000 (£500,000 − £325,000) = £70,000
Residence nil rate band £175,000 · £315,000 left, within the £325,000 nil rate band · no tax £10,000 of nil rate band unused (3.1%), transferable to a surviving spouse
Chargeable £500,000 − residence nil rate band £100,000 (the flat’s value) − £325,000 = £75,000 taxable → £30,000 £75,000 of residence nil rate band unused (42.9%), transferable to the husband
Baseline £700,000 − £325,000 + £50,000 = £425,000 · £50,000 is over 10% → 36% of £375,000 = £135,000 (instead of £150,000)
The first gift uses the whole nil rate band · the friend’s gift: 32% of £100,000 = £32,000 · the estate: 40% of £400,000 = £160,000
GOV.UK’s example leaves out the £3,000 annual exemptions: untick them in the calculator to get the same figures. With them, £6,000 of each gift is exempt and the friend pays less.
Thresholds and rates
- Nil rate band: £325,000. A late spouse’s or civil partner’s unused percentage is added, up to 100% more, so £650,000 at most (GOV.UK).
- Residence nil rate band: up to £175,000 when a home, or a share of one, that the person lived in passes to direct descendants. It is the lower of that and the value of the home (after its mortgage) they inherit, and it comes off the whole estate. A late spouse’s unused percentage is added, up to 100% (GOV.UK).
- Taper: the residence nil rate band falls by £1 for every £2 that the net estate (assets less debts, before reliefs and exemptions) is worth over £2 million, so a single person’s is gone at £2.35 million.
- Rate: 40% on the taxable estate, or 36% when at least 10% of the baseline amount goes to charity.
The government has fixed the thresholds and the taper at these levels (HMRC).
Direct descendants and the home
Direct descendants are children, grandchildren and further descendants, including adopted, foster and stepchildren and children for whom the person was a guardian, and their spouses or civil partners. Nephews, nieces and siblings do not count. Only one home qualifies, and the person must have lived in it at some point; a buy-to-let they never lived in does not. If the home is split between descendants and others, only the descendants’ share counts (GOV.UK).
The 36% charity rate
The baseline amount is the chargeable estate after the charity legacy, less the nil rate band available (including any transferred part, less what gifts used), plus the charity legacy again. The residence nil rate band is not deducted (IHTM45009). If the charity legacy is at least 10% of the baseline amount, the whole taxable estate is charged at 36%. When the estate is over the threshold, the calculator also tells you how much would need to go to charity for the lower rate.
Gifts and the 7-year rule
Gifts to people are free of Inheritance Tax if the giver lives 7 years after making them. Within 7 years they are added back, oldest first, and use up the nil rate band before the estate does. The part above it is taxed at 40% for gifts made less than 3 years before death, then 32% (3 to 4 years), 24% (4 to 5), 16% (5 to 6) and 8% (6 to 7) — that is taper relief. A death on a gift’s anniversary counts in the next, lower band. The tax on gifts is normally paid by the people who received them (GOV.UK).
The first £3,000 given each tax year is exempt (the annual exemption), and an unused exemption carries forward for one year. Small gifts of up to £250 per person, wedding gifts and regular gifts out of income are exempt too: leave those out.
Limitations
- Not covered: gifts into trusts and the tax on them in life, gifts with reservation of benefit (such as a home given away but still lived in), joint property passing by survivorship as a separate part of the estate, quick succession relief, foreign assets and the rules for people who were not long-term UK residents.
- The downsizing addition (when the person sold or downsized their home) is not worked out; HMRC’s residence nil rate band calculator covers it.
- Business and Agricultural Relief are entered as an amount; work them out under HMRC’s rules for the assets (Business Relief, Agricultural Relief).
- Unused pension funds are not worked out. Under the government’s policy paper, most unused pension funds and death benefits count towards the estate for deaths from 6 April 2027 (death in service benefits do not): for such a death, add them to Everything else.
- The annual exemption assumes no other gifts used it. Fall-in-value relief for gifts is not applied.
- An estimate for information, not tax or legal advice. Executors should report the estate to HMRC, and complex estates need a solicitor or accountant.
Privacy
Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.
Frequently asked questions
How much can I leave before Inheritance Tax is due?
£325,000 on its own. Leaving your home to children or grandchildren can add up to £175,000, so £500,000. A married couple or civil partners can pass on unused allowances to each other, so the second estate can leave up to £1 million tax-free — less for estates over £2 million.
What is the residence nil rate band?
An extra allowance of up to £175,000 when a home the person lived in goes to their direct descendants. It is limited to the value of the home they inherit and is reduced by £1 for every £2 the estate is worth over £2 million.
Do I pay Inheritance Tax on gifts?
Not if the giver lives for 7 years after the gift. If they die sooner, the gift uses up the nil rate band first and any part above it is taxed: at 40% within 3 years, and with taper relief from 3 to 7 years (32%, 24%, 16%, 8%).
How does leaving money to charity reduce Inheritance Tax?
A charity legacy is tax-free, and if it is at least 10% of the baseline amount the rest of the taxable estate is charged at 36% instead of 40%.
Can I use my late husband’s or wife’s allowance?
Yes. The percentage of their nil rate band and residence nil rate band that was not used when they died is added to yours, up to 100% of each. The executors claim it when the second person dies.
Is the home counted in the estate?
Yes, at its open market value less any mortgage. If it goes to a spouse or civil partner it is tax-free; if it goes to direct descendants it can bring in the residence nil rate band.