Inheritance Tax Calculator 2025/26
Estimate your UK inheritance tax liability using 2025/26 rates. Includes the nil-rate band (£325,000), residence nil-rate band (£175,000), spouse transfer and the £2m taper. See exactly how much IHT may be due on your estate.
Estate Details
Estimated IHT Liability
£0
0% effective IHT rate
Estate Value
£0
Nil-Rate Band
£0
Residence RNRB
£0
Total Nil Rate
£0
Taxable Estate
£0
Effective Rate
0%
How Inheritance Tax Works in the UK
Inheritance tax is charged at 40% on the value of an estate above the nil-rate band when someone dies. The nil-rate band has been frozen at £325,000 since 2009. Everything above this threshold is taxed at 40%, making IHT one of the highest-rate taxes in the UK.
The residence nil-rate band (RNRB) adds up to £175,000 per person when a main home is left to direct descendants — children, grandchildren or their spouses. This means a single person leaving their home to children has a combined threshold of £500,000.
For married couples and civil partners, any unused nil-rate band and RNRB transfers to the surviving spouse. This gives a maximum combined threshold of £1,000,000 before any IHT is due. However, for estates exceeding £2 million, the RNRB tapers away by £1 for every £2 above the threshold.
What You Need to Know About IHT
Assets passed to a spouse or civil partner are completely exempt from IHT. Charitable donations above 10% of the estate reduce the IHT rate from 40% to 36%. Business property relief (BPR) can exempt qualifying business assets at 100%, and agricultural property relief (APR) works similarly for farmland.
Gifts made during your lifetime are potentially exempt transfers (PETs). If you survive 7 years after making the gift, it falls outside your estate entirely. Gifts made 3-7 years before death benefit from taper relief, reducing the IHT due on a sliding scale. Everyone has a £3,000 annual exemption for gifts plus unlimited small gifts of up to £250 per recipient.
Frequently Asked Questions
What is the inheritance tax threshold for 2025/26?
The nil-rate band is £325,000 per person. Married couples can combine for £650,000. With the residence nil-rate band, a couple leaving their home to children can pass on up to £1 million tax-free.
How much inheritance tax do you pay in the UK?
IHT is charged at 40% on the estate value above the nil-rate band. If you leave 10% or more to charity, the rate drops to 36%. The effective rate depends on the size of your estate relative to your available allowances.
What is the residence nil-rate band?
An additional £175,000 allowance when your main home passes to direct descendants. It tapers by £1 for every £2 the estate exceeds £2 million. Married couples can combine for up to £350,000.
Do married couples pay inheritance tax?
Assets passed to a spouse are exempt from IHT. The surviving partner inherits unused nil-rate band and RNRB, effectively doubling the threshold when the second spouse dies.
Are gifts subject to inheritance tax?
Gifts made more than 7 years before death are exempt. Gifts within 7 years are potentially taxable. Taper relief reduces IHT on gifts made 3-7 years before death. Annual exemptions of £3,000 per year also apply.
How can I reduce my inheritance tax bill?
Common strategies include lifetime gifts (7-year rule), leaving assets to a spouse, charitable giving to reduce the rate to 36%, using trusts, and business or agricultural property relief. Professional estate planning advice is recommended.