Inheritance tax calculator UK 2026/27
This inheritance tax calculator UK estimates the Inheritance Tax on an estate for deaths in the 2026/27 tax year. Enter the value of the estate, the home left to children or grandchildren and what goes to a spouse or charity. It applies the £325,000 nil rate band, the £175,000 residence nil rate band with the taper above £2 million, any allowance passed on by a late husband, wife or civil partner and the reduced 36% rate.
How it is calculated
Inheritance Tax is 40% on the part of an estate above the tax-free thresholds. In 2026/27 everyone has a £325,000 nil rate band plus up to £175,000 residence nil rate band if the home goes to children or grandchildren – up to £500,000 per person and £1 million for a married couple or civil partners.
Thresholds 2026/27
| Allowance | Amount | Rule |
|---|---|---|
| Nil rate band | £325,000 | frozen until 5 April 2031 |
| Residence nil rate band | £175,000 | only for a home passing to direct descendants; at most the value of the home; frozen until 5 April 2030 |
| Taper | £1 for every £2 | of estate value above £2 million – gone completely at £2.35 million (£2.7 million with a transferred allowance) |
| Rate | 40% | 36% if at least 10% of the net estate goes to charity |
Couples, widows and widowers
Everything left to a husband, wife or civil partner is exempt. The part of the nil rate band and residence nil rate band not used on the first death is kept as a percentage and added to the survivor’s allowances: 100% unused means £650,000 + £350,000 = £1,000,000 tax-free on the second death. If the first death was before 6 April 2017, when the residence nil rate band started, 100% of it can be transferred.
Examples
- Single person: estate £800,000 including a £400,000 home left to the children. Thresholds £325,000 + £175,000 = £500,000, taxable £300,000, Inheritance Tax £120,000.
- Widower with transferred allowances: estate £1,000,000 with a £500,000 home, 100% transferred – no tax.
- Smaller home: estate £600,000, home £150,000. Only £150,000 of the residence nil rate band is used; taxable £125,000, tax £50,000.
- Taper: estate £2,100,000 with a £600,000 home. The residence nil rate band falls by £50,000 to £125,000; taxable £1,650,000, tax £660,000.
- Charity: estate £1,000,000, £400,000 home to the children, £100,000 to charity. The baseline is £900,000 − £325,000 + £100,000 = £675,000; 10% of it is £67,500, so the rate drops to 36%. Taxable £400,000, tax £144,000. Without the charity gift the tax would be £200,000.
How the 36% rate is tested
The gift to charity must be at least 10% of the baseline amount: the estate after exemptions, minus the nil rate band (including any transferred part), plus the charity gift back. The residence nil rate band is not deducted. Here the estate is treated as one component; with jointly owned assets, trusts or gifts with reservation HMRC tests each component separately – the result is then an estimate.
Changes in 2026 and 2027
Since 6 April 2026 agricultural property relief and business property relief give 100% relief only on the first £2.5 million of qualifying property and 50% above; unused allowance can pass to a surviving spouse or civil partner. Shares designated as “not listed”, such as AIM shares, get 50%. From 6 April 2027 most unused pension funds and death benefits will be included in the estate (Finance Act 2026). The calculator does not apply these reliefs or pensions – add pension pots to the estate value from April 2027 to see the effect.
Selling or buying property? See the stamp duty calculator.
Limits
Not included: gifts in the 7 years before death and taper relief on them, trusts, agricultural and business relief, quick succession relief, foreign assets and domicile rules, and grossing-up of tax-free legacies. Thresholds for deaths between 6 April 2026 and 5 April 2027. An estimate, not tax or legal advice.
Frequently asked questions
How much can you inherit before paying inheritance tax in the UK?
The estate, not the heir, pays the tax. Up to £325,000 is tax-free, up to £500,000 if the home goes to children or grandchildren, and up to £1 million for a married couple or civil partners.
How much inheritance tax on £800,000?
With a £400,000 home left to the children and no transferred allowance: £800,000 − £500,000 = £300,000 taxable at 40% = £120,000. A widow or widower with 100% transferred allowances pays nothing.
How does inheritance tax work for married couples?
Everything left to a spouse or civil partner is tax-free, and the unused allowances pass to the survivor. On the second death up to £1,000,000 can be passed on tax-free (£650,000 + £350,000).
What happens to the residence nil rate band above £2 million?
It falls by £1 for every £2 over £2 million. A single person’s £175,000 is gone at £2.35 million; for an estate of £2,100,000 it is £125,000.
How much do you need to leave to charity for the 36% rate?
At least 10% of the baseline amount. For a £1,000,000 estate with only the £325,000 nil rate band that is 10% of £675,000 = £67,500.
Are pensions subject to inheritance tax?
Not yet for most pensions. From 6 April 2027 most unused pension funds and death benefits will count towards the estate.
Sources and legal basis
- HMRC guidance: Inheritance Tax: GOV.UK – How Inheritance Tax works: £325,000 threshold, up to £500,000 with a home, 40% rate, 36% if 10% or more of the net value goes to charity, spouse and charity exemption, unused threshold transfers to the partner (read 08.10.2026)
- HMRC rates and allowances: IHT thresholds: HMRC – Inheritance Tax thresholds and interest rates: nil rate band £325,000 (6 April 2009 to 5 April 2031), residence nil rate band £175,000 (6 April 2020 to 5 April 2030) (read 08.10.2026)
- IHTA 1984 s. 8D: Inheritance Tax Act 1984, section 8D(5): residential enhancement £175,000, taper threshold £2,000,000 (read 08.10.2026)
- IHTA 1984 s. 8D: HMRC – Inheritance Tax: residence nil rate band: £1 for every £2 over £2 million, lower of home value and maximum, transfer of the unused percentage (read 08.10.2026)
- IHTA 1984 s. 8A: Inheritance Tax Act 1984, section 8A: transfer of unused nil-rate band between spouses and civil partners (read 08.10.2026)
- IHTA 1984 Sch. 1A: Inheritance Tax Act 1984, Schedule 1A: lower rate of 36% if the donated amount is at least 10% of the baseline amount (paras 2 and 5) (read 08.10.2026)
- IHTA 1984 Sch. 1A para 5: HMRC Inheritance Tax Manual IHTM45010: baseline amount example £750,000 − £50,000 − £325,000 + £50,000 = £425,000 (read 08.10.2026)
- Finance Bill 2025-26 (amending IHTA 1984): HM Treasury/HMRC – Agricultural property relief and business property relief changes: £2.5 million allowance at 100% from 6 April 2026, 50% above, transferable to a surviving spouse (read 08.10.2026)
- Finance Act 2026: HMRC – Inheritance Tax on pensions: technical note: unused pension funds and death benefits in the estate from 6 April 2027, legislated in Finance Act 2026 (read 08.10.2026)
As of: · Editorial policy
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