How does an inheritance tax calculator UK tool work?

It takes your estate value, outstanding debts, gifts and reliefs such as the nil-rate band and Residence Nil-Rate Band, then estimates the 40% Inheritance Tax charge on the value above your available thresholds.

What is the Inheritance Tax threshold for 2026/27?

Most estates benefit from a nil-rate band plus, if a home is left to direct descendants, an additional Residence Nil-Rate Band, together forming the total tax-free threshold before the 40% rate applies.

Do spouses pay Inheritance Tax on each other's estate?

Transfers between UK-domiciled spouses and civil partners are usually exempt from Inheritance Tax, and any unused nil-rate band can typically be transferred to the surviving spouse's estate.

Can gifts reduce my Inheritance Tax bill?

Yes. Gifts made more than 7 years before death are usually outside your estate for Inheritance Tax, and certain annual gift allowances and exemptions can reduce the taxable value further.

Does my home affect my Inheritance Tax threshold?

If you leave your home to children or other direct descendants, the Residence Nil-Rate Band can add an extra tax-free amount on top of the standard nil-rate band, reducing your Inheritance Tax bill.

Is Inheritance Tax the same as Capital Gains Tax?

No. Inheritance Tax is charged on the value of an estate when someone dies, while Capital Gains Tax is charged separately when a beneficiary later sells an inherited asset for more than its probate value.

2026/27 Rates

Inheritance Tax Calculator

Our inheritance tax calculator UK tool estimates your UK Inheritance Tax (IHT) liability using the latest 2026/27 thresholds, including the Residence Nil-Rate Band and spousal transfers.

Calculate Your IHT

Total Estate Value (£)

Include property, savings, investments and other assets

Marital / Civil Partner Status

Single / Widowed Married / Civil Partner

Does estate include a main residence left to direct descendants?

Yes No

Residence Nil-Rate Band (RNRB): £175,000 per person in 2026/27

Gifts Made in the Last 7 Years (£)

Gifts above the annual exemption that fall within 7 years of death

Business / Agricultural Relief (£)

100% relief for qualifying business/agricultural assets

Charitable Donations in Will (£)

Donations to charity reduce the taxable estate. 10%+ may reduce rate to 36%

IHT Allowances 2026/27

Nil-Rate Band (NRB)£325,000
Residence Nil-Rate Band (RNRB)£175,000
Max combined (single)£500,000
Max combined (couple)£1,000,000
Standard IHT Rate40%
Reduced Rate (10%+ charity)36%
Annual Gift Exemption£3,000/yr
Small Gift Exemption£250/person

How IHT Works

Inheritance Tax (IHT) is charged at 40% on the value of your estate above the Nil-Rate Band (£325,000). The Residence Nil-Rate Band provides an additional £175,000 allowance when a main home is left to direct descendants.

Married couples and civil partners can transfer unused NRB and RNRB to the surviving partner, potentially giving a combined threshold of £1,000,000.

Gifts made more than 7 years before death are generally exempt. Gifts within 7 years use the "taper relief" scale to reduce the IHT charged.

Need expert IHT planning advice? Our Manchester-based specialists can help structure your estate to minimise IHT legally and effectively.

Disclaimer: This calculator provides estimates only, based on standard 2026/27 IHT rules for England & Wales. It does not account for all reliefs, complex trust arrangements, business property relief conditions, or lifetime transfers. Results are for guidance only. Always consult a qualified tax or estate planning professional before making estate planning decisions.

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Inheritance Tax Calculator

Calculate Your IHT

IHT Allowances 2026/27

How IHT Works

Understanding Your Inheritance Tax Position

Who Should Use This Inheritance Tax Calculator