Inheritance Tax Calculator (UK Estimate)
Use this quick tool to estimate how much inheritance tax may be due on an estate. It uses common UK thresholds and gives a clear breakdown.
What this calculator does
This page answers the practical question: “how much inheritance tax will I pay?” The calculator gives an estimated UK inheritance tax bill using major rules most families encounter:
- Standard nil-rate band (NRB)
- Residence nil-rate band (RNRB)
- Spouse/civil partner exemption
- Reduced 36% rate where a qualifying charitable gift is made
- A simple way to include gifts made in the seven years before death
How inheritance tax is usually calculated in the UK
1) Start with the estate value
Add up assets such as property, money, investments, and personal items. Then subtract debts and allowable expenses (including certain funeral costs).
2) Subtract exempt transfers
Assets left to a spouse or civil partner are generally exempt from inheritance tax. Charitable gifts can also reduce the taxable estate and sometimes reduce the rate itself.
3) Apply available thresholds
Most people can use a nil-rate band, and many can also use a residence nil-rate band when passing a home to children or grandchildren. In some cases, unused allowances from a late spouse can be transferred.
4) Tax the remainder
The amount above available bands is typically taxed at 40%, or 36% where qualifying charity rules are met.
Key thresholds used by this estimate
- Nil-rate band: £325,000 per person (x2 where transferable allowance applies)
- Residence nil-rate band: up to £175,000 per person when a qualifying home passes to direct descendants
- Residence band taper: reduced for larger estates above £2 million
- Tax rates: 40% standard, 36% with qualifying charitable bequest conditions
Worked examples
Example A: Mid-size estate
An estate of £700,000 with £20,000 debts and no major gifts may have a taxable amount after allowances that is much lower than expected. Many families assume all assets are taxed, but that is not how UK inheritance tax works.
Example B: Estate with transferable allowances
If a surviving spouse can claim unused nil-rate and residence bands, available thresholds can double. This can significantly reduce or even eliminate inheritance tax in many common scenarios.
Example C: Large estate and taper impact
For larger estates, the residence nil-rate band can taper away. This is one reason high-value estates should be modeled carefully with a professional adviser.
Ways people reduce inheritance tax legally
- Use annual gift exemptions and regular gifts from income where rules are met
- Structure wills efficiently for spouse, children, and charity
- Review property ownership and residence band eligibility
- Consider life insurance written in trust to cover a potential tax bill
- Seek specialist advice for business, agricultural, or trust assets
Common mistakes to avoid
- Assuming inheritance tax is charged on the entire estate value
- Forgetting to include gifts made within seven years
- Ignoring transferable allowances from a late spouse/civil partner
- Missing documentation needed to support exemptions and reliefs
- Relying on outdated rules instead of current HMRC guidance
Important note
This calculator is an educational estimate, not legal or tax advice. UK inheritance tax can involve complex rules around trusts, business property relief, agricultural property relief, gift taper relief, and domicile status. For an exact figure, use current HMRC guidance and consult a qualified adviser.