Inheritance Tax Calculator
2026/27 thresholds — £325,000 nil-rate band, plus £175,000 more for a family home.
How is UK Inheritance Tax calculated?
Every individual has a £325,000 nil-rate band before any Inheritance Tax applies, plus an additional £175,000 residence nil-rate band if a qualifying home passes to children or grandchildren — up to £500,000 tax-free in total. Anything above the available threshold is taxed at 40%, reduced to 36% if at least 10% of the estate goes to charity. The residence nil-rate band tapers away by £1 for every £2 an estate exceeds £2 million, and both thresholds have been frozen since 2009, now confirmed frozen until April 2031 — meaning more estates get pulled into IHT each year purely from rising property values, even without any change in the rules themselves.
Frequently asked questions
What is the Inheritance Tax threshold for 2026/27?
£325,000 (the nil-rate band), plus an extra £175,000 (the residence nil-rate band) if a qualifying home passes to children or grandchildren — up to £500,000 tax-free for an individual, or £1 million for a couple who plan correctly. Both are frozen until April 2031.
What Inheritance Tax rate applies above the threshold?
40% on the portion of the estate above the available nil-rate bands, reduced to 36% if at least 10% of the estate is left to charity.
Does everything passing to a spouse avoid Inheritance Tax?
Yes — transfers between UK-domiciled spouses or civil partners are exempt from IHT entirely, and any unused nil-rate band and residence nil-rate band can typically be transferred to the surviving spouse for use on their own estate later.
Related searches
- inheritance tax calculator
- iht calculator uk
- inheritance tax threshold
- nil rate band
- residence nil rate band
- estate tax calculator
- how much inheritance tax will i pay
- 40% inheritance tax