UK Inheritance Tax Calculator 2025/26
Enter your estate value and circumstances to calculate inheritance tax. Updated for the 2025/26 tax year with the £325,000 nil rate band, £175,000 residence nil rate band, and transferable spouse allowances.
How UK Inheritance Tax works
Inheritance Tax (IHT) is charged at 40% on the value of an estate above the nil rate band (NRB) of £325,000. This threshold has been frozen since 2009 and will remain at £325,000 until at least April 2030.
If the deceased's home is passed to direct descendants (children or grandchildren), an additional £175,000 Residence Nil Rate Band (RNRB) applies, giving an individual threshold of up to £500,000.
Married couples and civil partners can transfer unused allowances to the surviving spouse, potentially giving a combined threshold of up to £1,000,000 (£325,000 + £175,000 each).
Key IHT thresholds for 2025/26
- Nil Rate Band: £325,000
- Residence Nil Rate Band: £175,000 (if main home passes to direct descendants)
- Combined individual threshold: up to £500,000
- Combined married couple threshold: up to £1,000,000
- IHT rate: 40% (or 36% if 10%+ of net estate left to charity)
- RNRB taper: reduces for estates over £2,000,000
Ways to reduce IHT
Common strategies include making gifts during your lifetime (exempt after 7 years), leaving 10%+ of your net estate to charity (reduces the rate to 36%), using trusts, and claiming Business Property Relief or Agricultural Property Relief.
Gifts and potentially exempt transfers
Gifts made more than 7 years before death are fully exempt from IHT. Gifts within 7 years are "potentially exempt transfers" (PETs) and may be taxed, with taper relief reducing the IHT payable as follows: 3-4 years = 20% discount, 4-5 years = 40%, 5-6 years = 60%, 6-7 years = 80%.
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- Selling assets before passing them on? Calculate the Capital Gains Tax you would owe on the sale.
- Pensions are usually outside your estate for IHT — see how much tax relief you get on contributions.
- Inheriting property that will be sold? Check the stamp duty if beneficiaries are buying a new home.
- Calculate your take-home pay to plan how much you can set aside for estate planning.
- View all UK income tax bands and rates for 2025/26.
Total value of the estate including property, savings, and investments
Is the main residence being left to direct descendants?
Are the beneficiaries children, grandchildren, or their spouses?
Unused nil rate band transfers between spouses, effectively doubling the threshold
% of net estate left to charity — 10%+ qualifies for a reduced 36% IHT rate
Value of gifts (potentially exempt transfers) made in the 7 years before death