UK Inheritance Tax Calculator
Calculate your potential inheritance tax liability with our comprehensive calculator. Get accurate estimates based on current UK tax thresholds and exemptions.
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Explore our detailed guides covering thresholds, exemptions, and planning strategies.
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Estate Assets
Total: £0Current market value of your main home
Holiday homes, buy-to-let properties, land
Bank accounts, ISAs, premium bonds, cash
Shares, unit trusts, investment bonds
Only if not written in trust
Value of assets in trust where you're a life tenant
Cars, jewelry, art, furniture, collectibles, business assets
Complete Guide to UK Inheritance Tax
Everything you need to know about inheritance tax planning, calculations, and strategies to minimize your tax liability.
Inheritance Tax (IHT) is a tax on the estate (property, money, and possessions) of someone who has died. It's charged at 40% on the value of the deceased person's estate above the tax-free threshold.
Current Tax Rate
40%
Standard rate on estates above threshold
Reduced Rate
36%
When 10%+ left to charity
Nil Rate Band
£325,000
Per individual
Residence Nil Rate Band
£175,000
For family home
Couple's Combined
£1,000,000
Maximum allowance
Important Notes
- • The Residence Nil Rate Band is only available when leaving your main residence to direct descendants
- • RNRB is tapered away for estates over £2 million (reduced by £1 for every £2 over the threshold)
- • Unused allowances can be transferred between spouses/civil partners
Assets to Include
- Property (main residence, buy-to-let, overseas property)
- Bank accounts, savings, and cash
- Investments (stocks, shares, bonds, ISAs)
- Pension funds (some types)
- Life insurance policies
- Vehicles, jewelry, art, and collectibles
- Business assets and shares in private companies
Debts to Deduct
- Outstanding mortgages
- Credit card debts and loans
- Funeral expenses (reasonable costs)
- Unpaid bills and taxes
- Legal and professional fees
Spouse/Civil Partner Exemption
Unlimited exemption for assets left to a UK-domiciled spouse or civil partner. For non-UK domiciled spouses, the exemption is limited to £325,000.
Charity Exemption
No inheritance tax on assets left to registered charities. If you leave 10% or more of your net estate to charity, the tax rate reduces from 40% to 36%.
Business Property Relief
Up to 100% relief on qualifying business assets, including shares in unlisted companies and assets used in a business you control.
Agricultural Property Relief
Up to 100% relief on agricultural land and buildings, subject to occupation and ownership requirements.
7-Year Rule
Gifts made more than 7 years before death are usually exempt from inheritance tax. Gifts made within 7 years may be subject to tax on a sliding scale (taper relief).
Annual Exemptions
Regular Gifts
Regular gifts from surplus income are exempt if they:
- • Are made regularly (same amount, same frequency)
- • Come from surplus income after normal expenditure
- • Don't affect your standard of living
Lifetime Planning
- Make use of annual exemptions early and regularly
- Consider potentially exempt transfers (PETs)
- Set up trusts for future generations
- Invest in business property relief qualifying assets
Will Planning
- Leave assets to spouse first to defer tax
- Consider charitable legacies for rate reduction
- Ensure residence nil rate band is preserved
- Review and update wills regularly
Step 1: Enter Assets
Input the current market value of all assets including property, savings, investments, and personal possessions. Use professional valuations where available.
Step 2: Deduct Debts
Enter all outstanding debts including mortgages, loans, and estimated funeral expenses. These will be deducted from the gross estate value.
Step 3: Add Gifts
Include any significant gifts made in the last 7 years. The calculator will apply taper relief where appropriate.
Step 4: Apply Exemptions
Select relevant exemptions such as spouse transfers, charitable donations, and business/agricultural reliefs to see your final tax liability.
Important Disclaimer
This calculator provides estimates based on current UK inheritance tax rules and should be used for guidance only. Inheritance tax planning is complex and individual circumstances vary significantly. We strongly recommend consulting with a qualified tax advisor, solicitor, or financial planner for personalized advice. Tax rules and rates may change, and this calculator may not account for all possible reliefs, exemptions, or complex scenarios that could apply to your situation.
How to Calculate Inheritance Tax
Understanding the step-by-step process of calculating inheritance tax in the UK
Calculate Gross Estate Value
Add up all assets including property, savings, investments, personal belongings, and business interests at their market value on the date of death.
Deduct Liabilities
Subtract debts, mortgages, funeral expenses, and administration costs to get the net estate value.
Apply Exemptions
Deduct spouse exemptions, charity gifts, and other qualifying exemptions from the net estate.
Add Lifetime Gifts
Include potentially exempt transfers (PETs) and chargeable lifetime transfers made within 7 years of death.
Apply Tax Thresholds
Use nil rate band (£325,000) and residence nil rate band (£175,000) allowances, including any transferred allowances.
Calculate Tax Due
Apply 40% tax rate (or 36% if 10%+ goes to charity) on the amount above the tax-free threshold.
Properties must be valued at market value on the date of death.
Consider getting professional valuations for accuracy.
Joint properties are valued at the deceased's share.
Gifts within 7 years of death may be taxable.
Annual exemption: £3,000 per year.
Small gifts: £250 per person per year.
Estate of £800,000
Tax Calculation
Community Questions & Answers
Real questions from our community about inheritance tax, answered by tax professionals and experts
It depends on the total value of the estate and available allowances. If the house is left to direct descendants (children/grandchildren), you may benefit from the Residence Nil Rate Band of £175,000 in addition to the standard £325,000 allowance. If the total estate is under these thresholds, no inheritance tax is due.
Yes, but there are rules. You can give away £3,000 per year tax-free (annual exemption), plus £250 to as many people as you like. Larger gifts may be 'potentially exempt transfers' - if you survive 7 years after making the gift, it becomes tax-free. If you die within 7 years, the gift may be subject to inheritance tax on a sliding scale.
Yes! This is called 'transferable nil rate band'. If your spouse didn't use their full £325,000 allowance (because they left everything to you, which is exempt), you can claim the unused portion when you die. This could give you up to £650,000 tax-free allowance. The same applies to the residence nil rate band.
Business assets may qualify for Business Property Relief (BPR) at 100% or 50%, meaning they could be completely or partially exempt from inheritance tax. This includes shares in unlisted companies, business partnerships, and sole trader businesses. However, the business must meet certain criteria and you must have owned it for at least 2 years.
This can be complex. If the deceased was UK domiciled, their worldwide assets are subject to UK inheritance tax. If they were non-UK domiciled, only UK assets are taxable. Your own tax position depends on your domicile status. Double taxation agreements may apply if tax is due in multiple countries. Professional advice is essential for international estates.
Gifts to UK registered charities are completely exempt from inheritance tax. Even better, if you leave 10% or more of your net estate to charity, the inheritance tax rate on the rest reduces from 40% to 36%. This can result in significant savings while supporting good causes.
Have a Question?
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Disclaimer: The information provided is for general guidance only and should not be considered as professional tax advice. Always consult with a qualified tax advisor for your specific circumstances.
Frequently Asked Questions
Get answers to the most common inheritance tax questions from UK taxpayers
Still Have Questions?
Inheritance tax can be complex, and every situation is unique. Our calculator provides estimates based on current rules, but professional advice is recommended for comprehensive estate planning.
When to Seek Professional Help:
- • Estates over £1 million
- • Complex family situations
- • Business or agricultural assets
- • International elements
- • Trust arrangements
Professional Services:
- • Chartered Tax Advisers
- • Solicitors specializing in wills
- • Chartered Accountants
- • Financial Planners
- • Estate Planning Specialists