Inheritance Tax Calculator

Inheritance Tax is one of those taxes people assume won’t touch them, right up until they’re sorting out a parent’s estate and discover the threshold is lower than they thought. This inheritance tax calculator gives you a straightforward estimate of what an estate might owe: enter the total value, say whether a home is being left to children or grandchildren, and see the result immediately. No sign-up, no appointment-booking, just the numbers.

A quick honesty note before you start: this is an estimate, not a tax bill. Real estates have debts to deduct, reliefs to claim and gifts to account for. But for getting a sense of scale — is this a £40,000 problem or a £200,000 problem — it’s the right starting point.

In short: Inheritance Tax is charged at 40% on the part of an estate above the tax-free threshold — £325,000, or £500,000 if a home is left to children or grandchildren. Enter the estate value and whether a qualifying home passes to children, and this inheritance tax calculator estimates the bill.

How this inheritance tax calculator works

Inheritance Tax (IHT) is charged on the estate of someone who has died: everything they owned, minus any debts. Each person has a tax-free threshold called the nil-rate band, currently £325,000. If a home is left to children or grandchildren, an additional residence nil-rate band of £175,000 applies, taking the total tax-free threshold to £500,000. Everything above the applicable threshold is taxed at a flat 40%.

Taxable amount = estate value − applicable threshold
IHT due = taxable amount × 40%

2026/27 IHT figures

Detail	Figure
Standard nil-rate band	£325,000
Residence nil-rate band (home left to children/grandchildren)	£175,000
Combined threshold with qualifying home	£500,000
Combined threshold for a married couple (transferable allowances)	Up to £1,000,000
Tax rate above threshold	40%
Assets left to a spouse or civil partner	Fully exempt
Payment deadline	Within 6 months of the end of the month of death

Note: the nil-rate bands are frozen at these levels until April 2031 (confirmed against current GOV.UK guidance).

The residence nil-rate band, explained properly

This is the part of the calculation that most often surprises people, so it’s worth spelling out. The extra £175,000 only applies if the property was the deceased’s main residence and it’s left directly to children, stepchildren, adopted children or grandchildren — not to siblings, friends or wider family. Leave the same house to a brother and the threshold drops back to £325,000, which on a £600,000 estate is a £70,000 difference in tax. The worked examples below show exactly that.

There’s also a taper: if the estate is worth more than £2 million, the residence allowance shrinks. This inheritance tax calculator applies that tapering automatically, but if you’re anywhere near £2 million, get proper advice rather than relying on an online estimate.

Spouses, civil partners and transferable allowances

Assets left to a spouse or civil partner are entirely exempt from Inheritance Tax, whatever they’re worth. On top of that, any unused threshold from the first spouse to die can usually be transferred to the survivor. In practice that means a married couple can potentially pass on up to £1 million tax-free between them — both nil-rate bands plus both residence nil-rate bands — provided the conditions for the residence band are met.

This inheritance tax calculator estimates a single person’s position. For a couple, the same logic applies to each partner’s share.

Worked examples

Example 1: £600,000 estate, home left to children

The full £500,000 threshold applies (£325,000 + £175,000).

Taxable amount: £600,000 − £500,000 = £100,000.
IHT due: £100,000 × 40% = £40,000.

Example 2: the same £600,000 estate, but no qualifying home

Perhaps the house is left to a sibling, or there’s no property involved. Only the standard £325,000 threshold applies.

Taxable amount: £600,000 − £325,000 = £275,000.
IHT due: £275,000 × 40% = £110,000.

Same estate value, £70,000 more tax. This is exactly why the calculator asks about the home before giving you a figure.

Example 3: £1,000,000 estate with the full threshold

Home left to children, so the £500,000 threshold applies.

Taxable amount: £1,000,000 − £500,000 = £500,000.
IHT due: £500,000 × 40% = £200,000.

What your result means, and what to do next

If the calculator shows a figure, that’s the amount the estate — not the beneficiaries personally — is expected to pay. Responsibility for paying it sits with the executor or administrator, and the deadline is tight: IHT is usually due within 6 months of the end of the month in which the person died. Interest starts accruing after that, so this isn’t something to leave until probate is sorted.

A few practical next steps. First, get a proper valuation of the estate — property, savings, investments, minus debts and funeral costs. Second, check whether the residence nil-rate band genuinely applies: was it the main home, and is it going directly to children or grandchildren? Third, look at anything the calculator doesn’t cover (below), because reliefs and exemptions can move the real bill a long way from this estimate. And if the figure is significant — or the estate is anywhere near £2 million — talk to a solicitor or qualified accountant. IHT is one of those areas where an hour of professional advice routinely pays for itself. To understand what came off earnings during the deceased’s working life, see how National Insurance is calculated on earnings. If you need to separate salary-based income from estate assets, work out pro rata salary figures with our calculator.

What this inheritance tax calculator doesn’t cover

Every estimate has edges, and you should know where this one’s are. The calculator doesn’t account for Business Property Relief or Agricultural Property Relief, both of which can substantially reduce tax on qualifying business assets or farmland. It doesn’t account for gifts made in the years before death, which can still count toward the estate depending on timing and value — the rules here are fiddly and this is general guidance only, not a substitute for advice. It doesn’t deduct specific debts or funeral expenses beyond the total estate value you enter. And it treats the residence nil-rate band taper in simplified form. For the income side of an estate, see how dividend tax works on investment income.

None of that makes the estimate useless — it makes it a starting point. If any of those apply, the real bill could be meaningfully lower (reliefs) or the calculation meaningfully more complex (gifts). That’s the point at which a professional earns their fee. It’s also worth remembering that IHT is assessed on the estate’s value at the date of death, not when probate is granted — so falling property prices after death don’t reduce the bill, though there are specific reliefs for certain assets sold at a loss.