Inheritance Tax Calculator
Estimate the IHT position of an estate — nil-rate band (£325,000), residence nil-rate band (£175,000 if passing a home to children), spousal NRB transfer for widowed survivors, business property relief under the April 2026 rules, and charitable exemptions.
Property, investments, savings, personal assets
For the residence nil-rate band (RNRB)
After annual £3,000 and other exemptions
From April 2026: first £1m at 100% relief, above at 50%
Estate split
IHT calculation
| Line | Amount | Notes |
|---|---|---|
| Gross estate value | £600,000.00 | |
| Net estate value | £600,000.00 | |
| Nil-rate band (NRB) | −£325,000.00 | £325,000 |
| Residence nil-rate band (RNRB) | −£175,000.00 | £175,000 max |
| Chargeable estate | £100,000.00 | |
| Inheritance Tax due (40%) | £40,000.00 | 6.7% of net estate |
This is an estimate for planning purposes. Married couples / civil partners do not pay IHT on transfers to each other (spouse exemption). The nil-rate band is frozen at £325,000 until at least April 2030. From April 2026, Business and Agricultural Property Relief is capped: 100% on the first £1m, 50% on the excess. IHT is typically due six months after the date of death. Take professional advice before making estate-planning decisions.
Frequently asked questions
What is the inheritance tax nil-rate band?
Every estate has a nil-rate band of £325,000 — the amount that can pass free of IHT. The IHT rate is 40% on the amount above this threshold. The nil-rate band is frozen at £325,000 until at least April 2030. On the default example — a £600,000 estate with a £400,000 home passing to children — the IHT due is £40,000.
What is the residence nil-rate band (RNRB)?
The RNRB is an additional £175,000 allowance (in 2026/27) available when the deceased's main home passes to direct descendants — children, grandchildren, or their spouses. This brings the potential IHT-free threshold to £500,000 for a single person, or £1,000,000 for a married couple who each have an unused NRB and RNRB to transfer. The RNRB tapers away at £1 per £2 of net estate above £2,000,000.
What happens to IHT between spouses?
Transfers between spouses and civil partners are completely exempt from IHT — there is no limit on the spousal exemption. Any unused NRB and RNRB from the first death can also be transferred to the survivor's estate, potentially doubling the threshold. This is what makes the £1,000,000 threshold possible for married couples.
What is Business Property Relief and how has it changed?
Business Property Relief (BPR) and Agricultural Property Relief (APR) provide relief on qualifying business assets. From April 2026 (Autumn Budget 2024), 100% relief applies on the first £1,000,000 of qualifying assets; assets above £1,000,000 receive 50% relief, giving an effective IHT rate of 20% on the excess rather than full exemption. This affects family businesses, farms, and AIM shares that previously benefited from unlimited 100% relief.
What gifts are exempt from IHT?
Gifts made more than 7 years before death are outside the estate and not subject to IHT. Gifts within 7 years potentially reduce the available nil-rate band (or the excess faces IHT, with taper relief for gifts 3–7 years before death). Exempt gifts include: the annual exemption (£3,000/year), small gifts (£250 per recipient), wedding gifts (up to £5,000 from a parent), and gifts from regular surplus income.