Estimate the inheritance tax (IHT) on an estate in seconds. Enter the estate value and a few details, and the calculator applies the £325,000 nil-rate band, the £175,000 residence band and the 40% rate to show what's due and what's left.
2026/27 nil-rate bands
Inheritance tax is charged at 40% on the value of an estate above the available tax-free bands. Two main allowances apply:
Married couples and civil partners can transfer any unused bands to the survivor, so a couple can potentially pass on up to £1 million tax-free. Transfers between spouses are themselves exempt.
A single person with a £600,000 estate who leaves their home to their children gets £325,000 + £175,000 = £500,000 tax-free. The remaining £100,000 is taxed at 40% = £40,000 of IHT, leaving £560,000 for the family.
| Estate (single, home to children) | IHT due | Left over |
|---|---|---|
| £500,000 | £0 | £500,000 |
| £600,000 | £40,000 | £560,000 |
| £800,000 | £120,000 | £680,000 |
| £1,000,000 | £200,000 | £800,000 |
Common, legitimate ways to cut IHT include making gifts (which fall outside the estate after seven years), leaving at least 10% of the net estate to charity (which drops the rate to 36%), using trusts, and pension planning. This is a complex area — always take advice from a qualified estate planner or solicitor. For planning the value of your assets, see the CGT and pension calculators.
The standard nil-rate band is £325,000, plus an extra residence band of up to £175,000 when you leave your home to direct descendants. A married couple can combine both, so up to £1 million can pass on tax-free.
For a single person leaving a home to children, £500,000 is covered by the bands, so £100,000 is taxed at 40% — about £40,000 of IHT, leaving £560,000.
It's 40% on the estate above the available bands, falling to 36% if at least 10% of the net estate goes to charity. Transfers between spouses are usually exempt.
Gifts made more than seven years before death usually fall outside the estate. Gifts within seven years may be taxed on a sliding "taper relief" scale. Some gifts, like £3,000 a year, are always exempt.
