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Inheritance Tax Calculator
Estimate your UK inheritance tax liability with nil-rate bands and reliefs.
Nil-Rate Bands
NRB + RNRB automatically calculated
Residence Relief
Extra allowance for your main home
Spouse Transfers
Double allowances with transferred bands
Calculate Inheritance Tax
Enter your estate details for a UK IHT estimate.
How UK Inheritance Tax Is Calculated
Step-by-Step
1. Total estate value
2. - Nil-rate band (£325K)
3. - Residence nil-rate band (£175K)
4. = Taxable estate
5. × 40% (or 36% with charity)
The nil-rate band has been frozen at £325,000 since 2009. With house prices rising, more estates are being caught by IHT. The RNRB was introduced in 2017 to help with this.
Worked Example
Estate worth £750,000 including a £350,000 home, left to children. NRB = £325,000. RNRB = £175,000 (home to descendants). Total nil rate = £500,000. Taxable estate = £250,000. IHT at 40% = £100,000. Effective rate on the whole estate = 13.3%.
Inheritance Tax Allowances and Reliefs
Nil-Rate Bands
NRB: £325,000 per person (frozen since 2009). RNRB: up to £175,000 for homes left to direct descendants. Both are transferable between spouses — a surviving spouse can inherit the unused portion, potentially doubling the available allowance to £1,000,000.
Reliefs and Exemptions
Spouse exemption: unlimited transfers between spouses. Charitable rate: 36% instead of 40% if 10%+ of the net estate goes to charity. Business Property Relief (BPR): up to 100% for qualifying businesses. Agricultural Property Relief (APR): for qualifying farmland.
How to Use This IHT Calculator
Enter Estate Details
Total value, residence value, and gifts.
Select Options
Descendants, spouse transfer, charitable giving.
View Breakdown
IHT liability, effective rate, and nil-rate usage.
Strategies to Reduce Your Inheritance Tax Bill
- Make gifts during your lifetime. Gifts become exempt after 7 years. Use annual exemptions (£3,000/year), small gifts (£250 per person), and wedding gifts. Regular gifts from surplus income are immediately exempt.
- Leave 10%+ to charity. Leaving at least 10% of your net estate to charity reduces the IHT rate from 40% to 36%. This can sometimes mean beneficiaries receive more despite the charitable donation.
- Pension pots are outside your estate. Pension funds are generally not subject to IHT. Drawdown instead of purchasing an annuity allows you to pass the remaining pot to beneficiaries.
- Life insurance in trust. A life insurance policy written in trust pays out outside the estate, providing liquidity to cover the IHT bill without increasing the taxable estate.
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