UK Inheritance Tax Calculator 2026 HMRC style
Accurate IHT estimator for estates, married couples, gifts & residence nil rate band. Updated for 2026/27 thresholds.
Inheritance tax calculator — UK
Estimate the inheritance tax due on an estate based on current 2026 allowances. Enter details below:
⚠️ This is an estimate. Professional advice recommended. Based on 2026/27: NRB £325,000, RNRB up to £175,000, tapered above £2M.
How inheritance tax is calculated in the UK (2026)
Inheritance Tax (IHT) is charged at 40% on the value of your estate above the available tax-free thresholds. The main allowances are the Nil Rate Band (NRB) of £325,000 and the Residence Nil Rate Band (RNRB) up to £175,000 when passing a main home to direct descendants. For 2026, the allowances remain frozen until 2030. Married couples and civil partners can combine both allowances, potentially leaving up to £1 million tax-free.
When the second parent dies, the unused NRB and RNRB from the first spouse can be transferred, often making the total threshold £325,000 x2 + £175,000 x2 = £1,000,000. Our calculator accounts for transferable NRB and RNRB separately.
| Allowance type | 2026 threshold | Eligibility |
|---|---|---|
| Standard Nil Rate Band (NRB) | £325,000 | Everyone |
| Residence Nil Rate Band (RNRB) | £175,000 | Home left to children/grandchildren |
| Transferable NRB (spouse) | Up to 100% unused | Surviving spouse/civil partner |
| Transferable RNRB (spouse) | Up to 100% unused | Second death qualifies for RNRB |
| Charity exemption | Rate reduces to 36% | ≥10% of net estate to charity |
7 year rule & gift inheritance tax calculator (lifetime gifts)
Gifts made within 7 years before death may be subject to IHT if they exceed the annual exemption (£3,000 per year). Taper relief applies after 3 years. Use our quick guide: gifts become progressively less taxed after year 3. For accurate gift tax, HMRC considers PETs (Potentially Exempt Transfers). Below is the taper relief table:
| Years between gift and death | Tax rate on gift (above NRB) |
|---|---|
| 0 – 3 years | 40% |
| 3 – 4 years | 32% |
| 4 – 5 years | 24% |
| 5 – 6 years | 16% |
| 6 – 7 years | 8% |
| 7+ years | 0% (fully exempt) |
Inheritance tax when second parent dies calculator
For married couples, the combined NRB can be up to £650,000, plus RNRB up to £350,000 (if both owned a qualifying home). Our calculator lets you tick “transfer NRB” and “transfer RNRB” to simulate the unused spouse allowances. This correctly reflects the tax-free threshold of up to £1,000,000.
Example: Husband dies in 2020, leaving everything to wife. His £325,000 NRB and £175,000 RNRB unused. Wife dies in 2026 with estate £850,000 + house £400,000 to children. Total available threshold = £325,000 (hers) + £325,000 (transferred NRB) + £175,000 (hers RNRB) + £175,000 (transferred RNRB) = £1,000,000 tax-free. IHT due only on excess.
How to calculate inheritance tax step by step
- Add all assets (property, savings, investments, chattels).
- Deduct debts & funeral costs → net estate.
- Subtract available Nil Rate Bands (standard + transferable NRB + RNRB + transferable RNRB).
- Apply 40% tax on remaining value (or 36% if charitable donation ≥10%).
- Consider any chargeable lifetime gifts within 7 years (these may reduce NRB).
Using our inheritance tax calculator uk above automates this process for 2026 rules.
Complete guide: Calculating inheritance tax in the UK
Whether you're an executor or planning ahead, knowing how inheritance tax is calculated helps you minimise liability. The standard IHT rate is 40% on anything above the combined nil-rate bands. For 2026, the key allowances remain fixed:
- Standard nil-rate band (NRB): £325,000 per individual.
- Residence nil-rate band (RNRB): £175,000 per person when a home is passed to children/grandchildren.
- Transferable nil-rate band: unused NRB and RNRB of a deceased spouse can be claimed on the second death.
If the estate exceeds £2 million, the RNRB is tapered: reduced by £1 for every £2 above the threshold. Our calculator includes this taper automatically. Additionally, how much inheritance tax will I pay calculator depends on deductions like Business Relief, Agricultural Relief, and charitable legacies.
Inheritance tax calculator for married couples & widowers
For surviving spouses, the inheritance tax calculator uk widower scenario is powerful: you can potentially shelter up to £1 million. Use both transfer checkboxes to reflect the spouse's unused allowances. This relief often means many middle-value estates pay zero IHT.
| Estate value | Qualifying home? | Transfer NRB + RNRB | IHT due |
|---|---|---|---|
| £400,000 | Yes | No | £0 (threshold £500k) |
| £600,000 | Yes | No | £40,000 |
| £750,000 | Yes | Yes (both) | £0 (threshold £1M) |
| £950,000 | Yes | Yes (both) | £0 |
Pro tip: Using a free inheritance tax calculator uk like ours provides real-time results. Remember that if the estate qualifies for 36% due to charity donation, tax can be reduced significantly.
Frequently asked questions about inheritance tax
If you leave your main home to direct descendants, you qualify for the Residence Nil Rate Band (RNRB) of up to £175,000 (2026). Combined with the standard £325,000 nil-rate band, up to £500,000 can be tax-free. Any excess is taxed at 40% (or 36% if 10% given to charity).
When the second parent dies, any unused nil-rate band from the first deceased spouse can be added. That means the surviving spouse's threshold can double: up to £650,000 NRB plus up to £350,000 RNRB (combined) = £1,000,000 tax-free allowance. Use the transfer NRB and transfer RNRB checkboxes in our calculator to simulate.
Gifts made within 7 years before death are called PETs (Potentially Exempt Transfers). If total gifts exceed the annual exemption (£3,000) and the donor dies within 7 years, they may be subject to IHT. Taper relief applies after 3 years (see table above). Gifts older than 7 years are fully exempt.
When you inherit a property, no CGT is due at the time of inheritance. However, if you later sell the property, CGT is calculated on the gain from the probate value to the sale price.
If the estate is below the combined NRB/RNRB and no chargeable gifts were made, you may still need to submit an IHT205 (unless it’s an excepted estate). Always check with HMRC.
If inheritance tax is paid late, HMRC charges interest. The current rate is around 2.25% – 3.25% (variable). Pay within 6 months of death to avoid extra interest.