UK Inheritance Tax Calculator: Nil-Rate Band & 40%

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Formula at a glance

UK Inheritance Tax Calculator: Inheritance tax — 40% × (estate − exempt gifts − £325,000 − residence band). Example: £900,000 estate, widow with home to children → Inheritance tax: £0 — How the UK Inheritance Tax Calculator works: Inheritance tax — 40% × (estate − exempt gifts − £325,000 − residence band)

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📘 About the UK Inheritance Tax Calculator

Inheritance tax is 40% on the part of an estate above the tax-free threshold. Everyone has a £325,000 nil-rate band, plus a £175,000 residence nil-rate band if a home goes to children or grandchildren — £500,000 in total, and up to £1 million for a married couple because unused bands pass to the surviving partner.

The residence band is reduced by £1 for every £2 the estate is worth over £2 million. Anything left to a spouse, civil partner or charity is exempt, and leaving at least 10% of the net estate to charity cuts the rate to 36%. Both bands are frozen until April 2031.

🧮 Formula

Inheritance tax

40% × (estate − exempt gifts − £325,000 − residence band)

Residence band taper

£175,000 − (estate − £2m) ÷ 2

✏️ Worked examples

£900,000 estate, widow with home to children

You enter
Total value of the estate	900,000 £
Debts and funeral costs	0 £
Home left to children or grandchildren?	Yes
Value of the home	500,000 £
Unused allowances from a late spouse or civil partner?	Yes
Left to a spouse or civil partner	0 £
Left to charity	0 £

You get
Inheritance tax	£0
Estate after debts	£900,000
Nil-rate band	£650,000
Residence nil-rate band	£350,000
Tax-free threshold in total	£1,000,000
Taxed at 40%	£0
Left to beneficiaries	£900,000

£0.

£750,000 estate, single, home to children

You enter
Total value of the estate	750,000 £
Debts and funeral costs	0 £
Home left to children or grandchildren?	Yes
Value of the home	400,000 £
Unused allowances from a late spouse or civil partner?	No
Left to a spouse or civil partner	0 £
Left to charity	0 £

You get
Inheritance tax	£100,000
Estate after debts	£750,000
Nil-rate band	£325,000
Residence nil-rate band	£175,000
Tax-free threshold in total	£500,000
Taxed at 40%	£250,000
Left to beneficiaries	£650,000

£100,000.

🧭 How to use this calculator

What you enter

Total value of the estate (£)
Debts and funeral costs (£)
Home left to children or grandchildren?
Value of the home (£)
Unused allowances from a late spouse or civil partner?
Left to a spouse or civil partner (£)
Left to charity (£)

What you get

Inheritance tax
Estate after debts
Nil-rate band
Residence nil-rate band
Tax-free threshold in total
Taxed at 40%
Left to beneficiaries

❓ Frequently asked questions

What is the inheritance tax threshold in 2026?

£325,000 per person, plus £175,000 if your home goes to direct descendants — up to £1 million for a couple.

How much is inheritance tax?

40% on the value above the threshold, or 36% if 10% or more of the net estate goes to charity.

Are gifts taxed?

Gifts made more than 7 years before death are usually free of inheritance tax. You can also give £3,000 a year and small gifts of £250 tax-free.

Will pensions be included?

From 6 April 2027 most unused pension funds and death benefits will count towards the estate.

🏛️ UK Inheritance Tax Calculator