UK inheritance tax calculator
UK inheritance tax (IHT) is charged at 40% above your available nil-rate bands. This is how the bands, the residence uplift, the spouse exemption and the 7-year gift rule combine in 2026 — and where families most often lose relief.
Reflects 2026 UK (HMRC) rules · bands frozen to April 2031 · an estimate, not advice.
Model your UK estate — free →The 2026 figures
- £325,000 nil-rate band (NRB) per person, plus up to £175,000 residence nil-rate band (RNRB) where a home passes to direct descendants.
- 40% on everything above the available bands (36% if 10%+ of the estate passes to charity).
- Both bands are frozen to April 2031 — as estates grow, more of them are dragged into IHT.
- RNRB taper: the residence band is withdrawn by £1 for every £2 of estate above £2,000,000, so it vanishes entirely on larger estates.
The spouse exemption and transferable bands
Transfers between spouses and civil partners are exempt, and any unused NRB and RNRB pass to the survivor. A married couple can therefore combine up to £650,000 of NRB and £350,000 of RNRB — up to £1,000,000 tax-free where a home passes to children — before 40% applies.
Lifetime gifts and the 7-year rule
- A gift to an individual is a potentially exempt transfer: fully tax-free if you survive 7 years, with taper relief on the tax between years 3 and 7.
- £3,000 annual gift exemption, plus small-gift and normal-expenditure-out-of-income exemptions.
Business, agricultural and pension changes
- From 6 April 2026, 100% Business and Agricultural Relief is capped at £2.5M of combined qualifying assets (transferable to £5M between spouses), 50% above; AIM shares fall to 50% relief.
- Unused pensions are drawn within the IHT net from 6 April 2027 — a major change for estates that used pensions to pass wealth.
- HeirCalc flags Business/Agricultural Relief rather than auto-applying it (the conditions are strict), so a business or farm figure is shown as a ceiling to confirm.
See your own numbers
HeirCalc applies the nil-rate band, the residence nil-rate band and its taper, the spouse exemption and the 40% rate to your exact estate — and shows the statutory reason behind every figure. It runs entirely in your browser; nothing is saved or sent anywhere.
Run your UK estate in HeirCalc →This guide is general information for 2026, not legal, tax, or financial advice. The outcome turns on precise facts — residence, domicile, the exact assets, reliefs and elections available, and how title is held — that can change the result. Confirm your situation with a qualified professional. HeirCalc is an estimator by Krometis Analytics.