Inheritance Tax Calculator UK
This inheritance tax calculator UK applies the 2026/27 rules: the first £325,000 of an estate is covered by the nil-rate band, a further £175,000 can be covered when a home passes to children or grandchildren, and the rest is taxed at 40%. For example, a £740,000 estate including a £400,000 home left to children has £240,000 taxable and a bill of £96,000.
Add any unused allowance from a late spouse or civil partner, gifts made in the last seven years and any charity legacy to see the effect.
- Nil-rate band£325,000
- Residence band£175,000
- IHT rate40% (36% with charity)
Updated November 2026 · Uses 2026/27 HMRC thresholds
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Inheritance tax thresholds 2026/27
Each person has a nil-rate band of £325,000. A residence nil-rate band of up to £175,000 is added when a home, or a share of one, passes to direct descendants such as children, stepchildren or grandchildren. Both bands are frozen until April 2031. Anything left to a spouse, civil partner or charity is exempt.
| Allowance | Single person | Married couple or civil partners |
|---|---|---|
| Nil-rate band | £325,000 | £650,000 |
| Residence nil-rate band | £175,000 | £350,000 |
| Total tax-free | £500,000 | £1,000,000 |
| Residence band taper starts | Estate over £2,000,000 | Estate over £2,000,000 |
How inheritance tax is worked out
- Add up everything the person owned and take off debts and funeral costs.
- Take off anything left to a spouse, civil partner or charity.
- Take off the nil-rate band, reduced by any gifts made in the seven years before death.
- Take off the residence nil-rate band if the home goes to direct descendants. It is cut by £1 for every £2 the estate is over £2 million.
- Tax the rest at 40%, or 36% if at least 10% of the net estate (the baseline amount) is left to charity.
Transferring a late spouse’s allowance
If the first spouse or civil partner to die did not use their bands, for example because they left everything to the survivor, the unused percentage passes to the survivor. A couple can therefore pass on up to £1 million tax-free. The executors claim the transfer when the second person dies, using the IHT forms that go with the estate return.
Inheritance tax on pensions from April 2027
Most unused pension funds and pension death benefits are currently outside the estate. For deaths on or after 6 April 2027 they will be counted when working out inheritance tax. Pensions left to a spouse or civil partner stay exempt, and death-in-service benefits from registered schemes are expected to stay outside the rules. Choose the later date of death to see how a pension pot changes the bill, including the residence band taper for estates over £2 million.
Frequently asked questions
What is the inheritance tax threshold for 2026/27?
The nil-rate band is £325,000 per person, plus up to £175,000 residence nil-rate band when a home goes to children or grandchildren. Both are frozen until April 2031.
How much can a married couple leave tax-free?
Up to £1 million, by combining two £325,000 nil-rate bands and two £175,000 residence bands, as long as the home goes to direct descendants and the estate is under £2 million.
What is the 7-year rule for gifts?
Gifts to people are free of inheritance tax if you live seven years after making them. Gifts in the seven years before death use up the nil-rate band first, and taper relief can reduce tax on gifts made three to seven years before death.
Will my pension be subject to inheritance tax?
From 6 April 2027 most unused pension funds and death benefits will be included in the estate for inheritance tax. Pensions left to a spouse or civil partner remain exempt.
When is inheritance tax paid?
It must be paid by the end of the sixth month after the death, otherwise HMRC charges interest. Tax on some property can be paid in 10 yearly instalments.
Sources and method
We use official UK guidance and recognised formulas, and test each calculator against worked examples. Results are estimates to help you plan, not professional advice. See how we work.