Inheritance tax calculator
What an estate owes, band by band — with the residence nil-rate band taper priced, gifts charged in date order, and the tax on the next pound shown separately, because on a large estate it is half as much again as the headline rate.
Calculator
Everything owned at death — property, savings, investments, possessions — less debts and funeral costs, and before anything passing to a spouse or to charity is taken off. This is the figure the residence nil-rate band taper is measured against, so entering an after-exemption figure here quietly restores a band the tax has withdrawn.
The residence nil-rate band is capped at the value of a home closely inherited by direct descendants — children, grandchildren, their spouses, and step, adopted or foster children. Nephews, nieces and siblings are not direct descendants. Leave this at nothing if no home passes to a direct descendant; the band is then nil however large the estate.
Exempt without limit under IHTA 1984 s.18 — and this calculator assumes that unlimited version, which is the long-term UK resident case. Where the surviving spouse is not long-term UK resident the exemption is capped unless an election is made, and that is not modelled.
Exempt, and also the amount tested against the 10.00% boundary that earns the reduced death rate of 36.00% on everything else.
A percentage, not an amount: the survivor's band is increased by this share of the band in force at their own death. It is 100% where the first estate used none of its own band, which is the usual case when everything passed between spouses — and 100% is also the most that can ever be claimed, however many marriages have ended in death.
HMRC call this the brought-forward allowance. It is 100% for any death before 6 April 2017, when there was no residence band to use up. It raises the amount the taper has to eat through, so a survivor claiming it keeps some residence band at estate values where a single person has none.
Inheritance tax is charged by reference to the date of death, so the year selected here supplies every rate and threshold below — and fixes the date the gifts are counted back from.
The nil-rate band is £325,000 and the residence nil-rate band £175,000, both frozen until 6 April 2031. Above £2,000,000 of estate the residence band is withdrawn by £1 for every £2 — which is why the rate on the next pound in that stretch is not the 40.00% everyone quotes.
Gifts made in the 7 years before the death
Enter each gift separately. They are charged in date order, each one cumulating against the ones before it, so two gifts of half the size are not the same as one of the whole — which is why there is no single “total gifts” box here. A gift the donor survived by 7 complete years drops out entirely: it is not charged, and it does not cumulate against anything later either.
The £3,000 annual exemption may be carried into the next tax year, and no further, and only after that year's own exemption has been used. This calculator cannot see the year before your earliest gift, so it assumes that year's exemption was spent — the assumption that over-states the bill rather than under-stating it. Tick this only if you know it was not.
The bill, and every pound that made it
Inheritance tax of £660,000.00 on an estate of £2,100,000.00
That is 31.43% of everything charged, and the tax on the next pound of estate is 60.00%.
The next threshold above this estate is Residence nil-rate band fully withdrawn, and it is £250,000.00 away — measured in estate value, before any exemption, because that is what the thresholds are defined in and what you typed.
What each of those would do to the number above
Straight from the calculation engine, which attaches this list to every result it produces so that no page built on it can show a total without them.
- Business and agricultural property relief
- Qualifying business and farm assets are relieved at 100% or 50%, capped from 6 April 2026 at a combined £1 million allowance per estate. Neither the reliefs nor the allowance is modelled, so an estate holding qualifying property is over-taxed here. The reliefs also do not reduce the estate value used for the residence nil-rate band taper, so the interaction is not a simple scaling.
- Trusts and settled property
- No relevant property regime, ten-year anniversary charge, exit charge or qualifying interest in possession. Because a gift into trust is a chargeable lifetime transfer rather than a potentially exempt transfer, this also means the fourteen-year cumulation rule cannot arise, which is what makes the simple seven-year cumulation used here correct for the estates that are modelled.
- Long-term residence, excluded property and the capped spouse exemption
- From 6 April 2025 liability turns on long-term UK residence rather than domicile. This engine assumes the whole estate is within charge and that the spouse exemption is unlimited. It does not model excluded property, nor the capped spouse exemption that applies where the surviving spouse is not long-term UK resident and no election is made — an estate in that position is under-taxed here.
- Quick succession relief
- IHTA 1984 s.141 reduces the tax where the deceased themselves inherited within five years of their own death. Not modelled, so an estate entitled to it is over-taxed here.
- Grossing up and estate components
- The reduced charity rate is computed for a single general component — the free estate. Survivorship and settled-property components, elections to merge them, and the grossing up of tax-free legacies out of a partly exempt residue are not modelled. HMRC’s own example (IHTM45030) shows the 10% test flipping on the grossing up alone, so a will with tax-free legacies and an exempt residue needs professional calculation rather than this one.
- Small gifts, wedding gifts and normal expenditure out of income
- The £250 small-gift exemption is per recipient per tax year and is lost entirely if another exemption is used on the same person; wedding gifts depend on the donor’s relationship to the couple; normal expenditure out of income depends on a pattern of giving. None can be derived from a gift’s value and date alone. Pass the covered amount as the gift’s otherExemptAmount and it is deducted before the annual exemption, which is modelled in full.
- Gifts with reservation, the downsizing addition, instalments and interest
- A gift the donor still benefits from stays in the estate; the downsizing addition preserves residence nil-rate band for someone who sold or downsized their home. Neither is modelled, and nor are the instalment option or interest on late-paid tax. The first two under-state and over-state the bill respectively.
The residence nil-rate band is being withdrawn, and that is what the rate on the next pound is really about
This estate is £100,000.00 above the £2,000,000 taper threshold, so £50,000.00 of residence nil-rate band has been withdrawn — £1 for every £2. The band available fell from £175,000.00 to £125,000.00, and it reaches nil at an estate of £2,350,000.00.
So the next pound of this estate is charged at 60.00%, not 40.00%. The pound is taxed at the death rate like any other, and it also costs £0.50 of residence band that would have been charged at nothing — so the same pound is taxed one and a half times over. It is the highest rate in the inheritance tax system and it is not printed on any rate table, because it is not a rate: it is the death rate meeting a withdrawal.
The taper is measured on the estate before exemptions and reliefs, which has a consequence worth knowing even where no tax is due: an estate above the threshold that passes entirely to a spouse still has its residence band tapered, and the tapered figure is what fixes the percentage the survivor can carry forward.
Every pound of it, in the order the tax charges them
| Charged | Amount | Rate | Tax |
|---|---|---|---|
| Residence nil-rate band | £125,000.00 | 0.00% | £0.00 |
| Nil-rate band | £325,000.00 | 0.00% | £0.00 |
| Taxable estate | £1,650,000.00 | 40.00% | £660,000.00 |
| Total | £660,000.00 |
The rows add to the total exactly. Where a gift appears twice it is because part of it fell inside the nil-rate band and part above: the band is set against the gift’s full value and only the excess is charged, which is the order that makes taper relief mean what it means.
The allowances this estate had, and what it did with them
| Allowance | Available to this estate | Used | Left unused |
|---|---|---|---|
| Nil-rate band | £325,000.00 | £325,000.00 | £0.00 |
| Residence nil-rate band | £125,000.00 | £125,000.00 | £0.00 |
| Annual exemption | £0.00 | £0.00 | £0.00 |
The last column is not headroom. It says what this estate left unused, not what a larger estate could still shelter — and for the residence nil-rate band those are not merely different, they point in opposite directions. Above £2,000,000 the amount in the middle column is itself computed from the size of the estate, so reaching for more estate withdraws the very allowance the row appears to be offering. The number that answers “what does more cost me” is the rate on the next pound, above.
What this estate would pass on to a surviving spouse or civil partner
| Band | This estate’s own band | Unused | Transferable percentage |
|---|---|---|---|
| Nil-rate band | £325,000.00 | £0.00 | 0.00% |
| Residence nil-rate band | £175,000.00 | £0.00 | 0.00% |
A percentage, not an amount — that is what the law transfers. The percentage is applied to the band in force at the survivor’s death, so it is worth whatever the band is worth then rather than what it was worth now, and it is measured against a single band even where this estate claimed a transfer itself. The residence figure is measured after the taper, which is why an estate that pays no tax at all can still hand on less than it looks like it should.
Gifts in the 7 years before the death
No gifts entered, so nothing above includes one. Add them in the calculator and they are charged in date order, each cumulating against the ones before it.
Taper relief reduces the tax on a gift, not the value of the gift — and where the gift is inside the nil-rate band there is no tax for it to reduce, however long ago it was made. The nil-rate band is set against a gift’s full value, the death rate is charged on whatever is left, and only that tax is tapered. So a gift within the band shows no taper relief and no reduction in the amount of band it used: the money is out of the donor’s hands and the band is out of the estate’s. That is the half most readers have not been told, and it is usually the expensive half — a gift that costs no tax of its own can still leave the estate hundreds of thousands of pounds of band short.
A gift the donor survived by 7 complete years is an exempt transfer: not charged, and not cumulated against anything later either. The £3,000 annual exemption is set against gifts in the order they were made, and whatever is left over may be carried into the next tax year and no further. Gifts are counted back in calendar years from the death, which this calculator places on 6 April of the tax year selected.
The 36.00% rate, and the boundary that decides it
| Left to charity | £0.00 |
|---|---|
| Baseline amount | £1,775,000.00 |
| 10.00% of the baseline — what qualifying needs | £177,500.00 |
| Rate charged on the death estate | 40.00% |
This estate is £177,500.00 short of the boundary, so the death estate is charged at 40.00% rather than 36.00%. The baseline amount is the chargeable estate less the nil-rate band available to it, with the charitable legacy added back — and note that the residence nil-rate band is not deducted in working it out, which is the step most often got wrong and the one that would hand the reduced rate to estates that have not earned it.
What crossing it is worth, computed rather than described. The same estate with £177,500.00 left to charity instead of £0.00 pays £530,100.00 of tax on the death estate rather than £660,000.00 — £129,900.00 less.
And the other beneficiaries receive £1,392,400.00 instead of £1,440,000.00, a difference of £47,600.00. Both figures are the death estate only, because tax on a failed gift is primarily the recipient’s. This is arithmetic at a boundary, not a suggestion: what a will should say is a question about a family, and nothing on this page answers it.
Five things this figure does not know
It does not know what is in the estate, only what it is worth
Every relief in the system depends on what an asset is, and this page asks only for a total. Business and agricultural property relief, in particular, take qualifying assets out of charge at 100% or 50% and are not applied here at all — the list above says so, in the engine’s own words. An estate holding a trading business, a farm, or unquoted shares is over-taxed on this page, potentially by the entire bill.
It prices a death in the tax years it offers, and pensions come into charge in 2027
From 6 April 2027 most unused pension funds and death benefits fall inside the value of an estate for inheritance tax, and personal representatives rather than scheme administrators become responsible for reporting and paying it. That date is outside every tax year this calculator offers, so nothing above includes a pension — and because the estate value is also what the residence band taper is measured on, adding a pot to an estate near £2,000,000 can raise the rate on the next pound as well as the total. gov.uk sets out the change.
It assumes the whole estate is within charge, and that the spouse exemption is unlimited
Since 6 April 2025 liability turns on long-term UK residence rather than on domicile. This calculator assumes the long-term UK resident case throughout: no excluded property, and a spouse exemption with no cap. Where the surviving spouse is not long-term UK resident and no election is made, that exemption is capped and the figure here is too low.
It is one estate, on one date, with no trust anywhere near it
No relevant property regime, no ten-year anniversary charge, no exit charge, no interest in possession brought into the estate. That also means no chargeable lifetime transfers, which is why the gifts above are cumulated over 7 years rather than fourteen — a simple cumulation that is correct for the estates this page models and wrong for the ones it does not.
It is not a probate calculation, and no tax has been reported to anyone
There is no instalment option here, no interest on tax paid late, no grossing up of legacies left free of tax out of a partly exempt residue, and no allowance for who actually pays what. Inheritance tax is due six months after the end of the month of death and the forms are their own exercise; gov.uk explains what has to be reported, and an estate of any complexity is a job for a solicitor or an accountant rather than for arithmetic on a web page.
Worked example: the stretch where more estate costs more than the headline rate
One: £350,000 more estate, £210,000 more tax
Two estates, identical but for their size, both leaving a £500,000 home to children, neither claiming anything from a late spouse. The first is worth £2,000,000 and pays £600,000.00. The second is worth £2,350,000 — £350,000 more — and pays £810,000.00. The extra £350,000 has cost £210,000.00, which is 60.00% of it.
Nothing unusual happened. Across that stretch each pound of estate is charged at the death rate and withdraws £0.50 of residence nil-rate band that would have been charged at nothing — £1 of band for every £2 of estate, so the same pound is taxed one and a half times over. The first estate’s residence band is £175,000.00; the second’s is £0.00. Above £2,350,000 there is no band left to take and the rate on the next pound falls back to 40.00%.
| Figure | £2,000,000 | £2,350,000 |
|---|---|---|
| Residence nil-rate band before the taper | £175,000.00 | £175,000.00 |
| Withdrawn by the taper | £0.00 | £175,000.00 |
| Nil-rate band | £325,000.00 | £325,000.00 |
| Taxable estate | £1,500,000.00 | £2,025,000.00 |
| Inheritance tax | £600,000.00 | £810,000.00 |
| Rate on the next pound | 60.00% | 40.00% |
Two: a gift that attracted no tax, and cost the estate £118,800 anyway
An estate of £500,000 with no home passing to a direct descendant, and one gift of £300,000 made 6 years before the death. The gift is 6 years old, so the taper table charges 20.00% of the full death rate on it — and the relief is worth £0.00, because the tax it had to reduce was £0.00.
There is no tax on the gift because the nil-rate band covered it: after the £3,000 annual exemption the gift was £297,000.00, and the band absorbed all of it. That is the whole of the good news, and it is where most explanations stop. The band it absorbed is band the estate no longer has: £297,000.00 of it, leaving £28,000.00. The same estate with no gift at all pays £70,000.00. With the gift it pays £188,800.00 — £118,800.00 more, on a gift the taper relief table appeared to be discounting.
The error this example exists to correct is the belief that taper relief reduces the gift. It does not: HMRC put it plainly at IHTM14611 — it is “a percentage reduction in the tax which would otherwise be payable”, and “if no tax is payable on the transfer… there can be no relief”. Applying the percentage to the value instead would have shrunk this gift to a fifth of itself and handed the estate back band it never had, which is a difference of six figures on figures this size.
Methodology and sources
The calculation, in order
- Charge the gifts first, oldest to newest. Each one takes the annual exemption for its tax year, then whatever is left of the nil-rate band after the gifts before it. Tax is charged on the excess at the death rate, and only then is the taper percentage applied — to the tax.
- Work out the residence nil-rate band. The residential enhancement plus any brought-forward allowance, less £1 for every £2 by which the estate exceeds £2,000,000 — measured on the estate before exemptions and reliefs, and without the failed gifts in it.
- Take off what passes to a spouse or civil partner and what passes to charity. What is left is the chargeable estate.
- Set the residence band against it first, then the ordinary band. That order is gov.uk’s, and it matters: it leaves the maximum ordinary band unused, and the ordinary band is the one that transfers to a survivor as a percentage.
- Charge the rest at 40.00% — or at 36.00% where the charitable legacy is at least 10.00% of the baseline amount.
The rate on the next pound is measured, not looked up. It is 60.00% on the figures this page opens with. The calculator runs the whole estate again with one more pound in it and reports the difference, which is the only method that gets the residence band taper right without special-casing it — and the same method the income tax pages use for the personal allowance taper.
Rates and thresholds
| Figure | 2025/26 | 2026/27 |
|---|---|---|
| Nil-rate band | £325,000 | £325,000 |
| Residence nil-rate band | £175,000 | £175,000 |
| Residence band taper threshold | £2,000,000 | £2,000,000 |
| Residence band withdrawn | £1 per £2 of estate | £1 per £2 of estate |
| Rate on death | 40.00% | 40.00% |
| Reduced rate, and the share of the baseline it needs | 36.00% at 10.00% | 36.00% at 10.00% |
| Most of a late spouse’s band that can be transferred | 100% | 100% |
| A gift becomes exempt after | 7 complete years | 7 complete years |
| Taper relief — percentage of the full rate by complete years survived | 0: 100.00%; 3: 80.00%; 4: 60.00%; 5: 40.00%; 6: 20.00%; 7: 0.00% | 0: 100.00%; 3: 80.00%; 4: 60.00%; 5: 40.00%; 6: 20.00%; 7: 0.00% |
| Annual exemption, and how far it carries forward | £3,000, 1 year | £3,000, 1 year |
The two years shown are identical, and that is policy rather than a copy-paste. The nil-rate band has stood at its current figure since 6 April 2009, and Budget 2025 fixed the nil-rate band, the residence nil-rate band and the taper threshold at their current levels to the end of the 2030 to 2031 tax year. 6 April 2031 is the first date on which any of the three can move.
What this page does not model
Listed by the calculation engine rather than by this page, so that it cannot drift from what the engine actually does. Each one changes the answer rather than blurring it, and the reason beside every item in the breakdown above says which direction it is wrong in.
- Business and agricultural property relief
- Trusts and settled property
- Long-term residence, excluded property and the capped spouse exemption
- Quick succession relief
- Grossing up and estate components
- Small gifts, wedding gifts and normal expenditure out of income
- Gifts with reservation, the downsizing addition, instalments and interest
- Unused pension funds, which come into the charge on 6 April 2027 — after every tax year this page offers. That one is a fact about the calendar rather than a scope decision, which is why it is not in the engine’s own list.
Where the figures come from
- gov.uk — Inheritance Tax
- gov.uk — Inheritance Tax: gifts and the 7 year rule
- gov.uk — Inheritance Tax: residence nil rate band
- gov.uk — Inheritance Tax thresholds and interest rates
- gov.uk — Inheritance Tax: thresholds (Budget 2025)
- HMRC Inheritance Tax Manual IHTM14612 — taper relief
- HMRC Inheritance Tax Manual IHTM46023 — the residence band taper
- HMRC Inheritance Tax Manual IHTM43020 — transferring an unused nil-rate band
- HMRC Inheritance Tax Manual IHTM45009 — the baseline amount for the reduced rate
- gov.uk — Business Relief for Inheritance Tax
- gov.uk — Inheritance Tax on unused pension funds and death benefits
The rates and allowances in the table above were verified against gov.uk on 12 August 2026. That check covers the published figures this page computes with. It does not verify any result the page produces, and it has not yet been signed off by a person — the verification recorded in the source repository is an automated one. Check anything that matters against gov.uk, or with a solicitor or an accountant.
Every calculation runs in your browser. There is no application server and no database, so nothing you type is transmitted or stored. A share link is the exception: it carries your figures in the URL. More on what that means. Information, not advice.
Frequently asked questions
- How much inheritance tax will I pay?
Nothing on the first £325,000 of an estate, which is the nil-rate band, and 40.00% on what is above it. A home passing to children or grandchildren adds up to £175,000 more, and a surviving spouse or civil partner can carry forward the unused percentage of a late partner's bands on top of that. Everything passing to a spouse or civil partner is exempt without limit, and so is everything passing to charity. The calculator above works the whole thing out from the estate value, what passes where, and any gifts made in the 7 years before the death.
- Why is the rate on the next pound 60.00% rather than 40.00%?
Because above £2,000,000 the residence nil-rate band is withdrawn by £1 for every £2 of estate. A pound of estate in that stretch is charged at the death rate like any other, and it also costs £0.50 of band that would have been charged at nothing — so it is taxed one and a half times over. It is the highest rate in the inheritance tax system and it appears on no rate table, because it is not a rate: it is the death rate meeting a withdrawal. On an estate of £2,000,000 leaving a £500,000 home to children, the next pound costs 60.00%. Above £2,350,000 the residence band has gone entirely and the rate falls back to 40.00%.
- Does taper relief mean a gift made five years ago is only partly counted?
No, and this is the commonest misunderstanding in the whole of inheritance tax. Taper relief reduces the tax on a gift, not the value of the gift — HMRC's own manual says it "takes the form of a percentage reduction in the tax which would otherwise be payable", and that "if no tax is payable on the transfer because it does not exceed the nil-rate band, there can be no relief". So a gift that sits inside the nil-rate band gets no taper relief at all, however old it is, because there is no tax to reduce. It still uses up the band, which is the expensive half: in the worked example above a £300,000 gift made 6 years before the death attracts no tax of its own and leaves the estate £118,800.00 worse off.
- What is the 7 year rule?
A gift to another individual is a potentially exempt transfer: nothing is due at the time, and if the donor survives 7 complete years it becomes an exempt transfer and drops out completely — it is not charged, and it does not cumulate against any later gift either. Die within that window and the gift is brought back in, charged in date order with the nil-rate band set against it before the estate gets any, and the tax on anything above the band is reduced by the taper percentage for the number of complete years survived. This calculator asks for each gift's value and how many complete years before the death it was made, and charges them the way HMRC does.
- How does the transferable nil-rate band work?
It transfers as a percentage, not as a sum of money. When the first spouse or civil partner dies, whatever percentage of their nil-rate band went unused can be claimed by the survivor's estate, and it is applied to the band in force at the survivor's death rather than the band that existed at the first death. The most that can ever be claimed is 100% of one band, however many marriages have ended in death. The residence nil-rate band has its own version, called the brought-forward allowance, and it is 100% for any death before 6 April 2017 because there was no residence band then to use up. The calculator takes both as percentages for that reason.
- When is inheritance tax charged at 36.00%?
When at least 10.00% of the "baseline amount" is left to charity, the rate on the rest of the death estate falls from 40.00% to 36.00%. The baseline amount is the chargeable estate less the nil-rate band available to it, with the charitable legacy added back — and the residence nil-rate band is not deducted in working it out, which is the step most often got wrong. It is a cliff rather than a slope: a pound short and the reduced rate does not apply at all. The calculator shows how far the estate is from the boundary and, where it is short, recomputes the whole thing at the boundary so both sides are visible — what the tax falls by, and what the other beneficiaries give up.
- Does this calculator handle a family business or a farm?
No, and an estate holding either is over-taxed by it. Business and agricultural property relief take qualifying assets out of charge at 100% or 50%, and from 6 April 2026 the 100% rate is capped at a combined £1 million allowance per estate with 50% relief above it. None of that is modelled here, and the reliefs also do not reduce the estate value the residence nil-rate band taper is measured against — so the interaction is not a simple scaling either. The full list of what this calculation leaves out is shown next to the answer, taken from the calculation engine rather than written into the page, so it cannot go out of date against what the engine actually does.
- What happens to pensions from April 2027?
From 6 April 2027 most unused pension funds and death benefits fall inside the value of an estate for inheritance tax, and personal representatives rather than scheme administrators become responsible for reporting and paying it. Death in service benefits from a registered scheme, and dependants’ scheme pensions from a defined benefit or collective money purchase arrangement, are excluded. That date is outside every tax year this calculator offers, so no figure here includes a pension. It matters more than a larger number would suggest: the estate value is also what the residence nil-rate band taper is measured against, so a pot added to an estate near the taper threshold raises the rate on the next pound as well as the total.
- How many gifts can this calculator take?
5. That is a limit of the shareable link, which carries each gift as its own pair of fields rather than as a list, and not a limit in the tax — a donor may make any number. An estate with more gifts than that inside the 7-year window needs the whole schedule worked out together, in date order with cumulation, which is a job for a professional rather than for a web page.
- What does the calculator show on the figures it opens with?
An estate of £2,100,000 for 2026/27, with £500,000 of home passing to direct descendants and nothing to a spouse or to charity, pays £660,000.00. That is 31.43% of the estate, while the tax on the next pound is 60.00% — because the estate is above the taper threshold, so £50,000.00 of residence nil-rate band has already been withdrawn and each further pound withdraws more. Those three rates are all different and only one of them is published anywhere.