What rate is UK Inheritance Tax charged at?

40% on the value of the estate above the available allowances. The rate falls to 36% if at least 10% of the net estate is left to a qualifying charity.

How are gifts in the last 7 years treated?

Gifts made within 7 years of death can become liable for IHT. Gifts made within 3 years are taxed at the full 40%. Gifts made 3–7 years before death attract taper relief, reducing the rate progressively to 8%.

Does it work for Scotland and Northern Ireland?

Yes. IHT is a UK-wide tax administered by HMRC. The thresholds and rates are identical across England, Wales, Scotland and Northern Ireland. Intestacy and probate processes differ — but the IHT calculation does not.

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Free Tool · UK Inheritance Tax · 2026/27 Thresholds

UK Inheritance Tax Calculator

Estimate your UK Inheritance Tax liability in under a minute using the current HMRC thresholds. Inputs include estate value, your main home, gifts made in the last 7 years, charity donations and spouse transfer status. No sign-up. The figures recalculate as you change the inputs.

Written by: SL · Reviewed by: SL · Last updated: May 2026

Quick Answer

UK Inheritance Tax is charged at 40% on the value of an estate above £325,000 (the nil-rate band). An extra £175,000 residence nil-rate band applies when the main home passes to a direct descendant. Married couples and civil partners can combine allowances up to £1m. The rate drops to 36% if at least 10% of the estate goes to charity. Gifts made in the 7 years before death may be added back to the estate.

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Total estate value (£) Include the home, savings, investments, ISAs, personal possessions. Pensions paid directly to nominees are usually outside the estate.

Of which, the value of your main home (£) Just the home — your share if jointly owned. Used to calculate the £175,000 residence nil-rate band.

Gifts made in the last 7 years (£) Cash or asset gifts made more than the £3,000 annual exemption. These are added back to the estate (taper relief applies between years 3 and 7).

Charity donations in will (£) If 10% or more of the net estate is left to charity, the IHT rate on the rest drops from 40% to 36%.

Married or civil partner?

Yes No

If a previous spouse died and didn't use their £325,000 nil-rate band, the unused portion transfers to you (potentially doubling the allowances).

Deceased spouse's unused allowance available?

Yes — fully unused Partially used No / N/A

Leaving the home to children, grandchildren or other direct descendants?

Yes No

Required for the £175,000 residence nil-rate band. Partners and siblings don't count as direct descendants.

Estimated UK Inheritance Tax

£0

Estimate based on 2026/27 thresholds: £325,000 nil-rate band, £175,000 residence nil-rate band, 40% IHT rate (36% with 10%+ to charity). The residence nil-rate band tapers for estates over £2m. The calculator does not include business or agricultural reliefs, trusts, or non-UK domicile rules.

How the calculation works

The nil-rate band — £325,000

Every UK estate gets a basic allowance of £325,000 free of Inheritance Tax. This figure is frozen until at least April 2030. Estates below £325,000 pay no IHT.

The residence nil-rate band — £175,000

An additional allowance applies when the main home is left to a direct descendant — children (including step, adopted, fostered), grandchildren or great-grandchildren. The amount is the lower of (a) £175,000 or (b) the home's value. It tapers by £1 for every £2 above the £2m estate threshold, so an estate of £2.35m loses the residence allowance entirely.

The transferable nil-rate band (married couples and civil partners)

When a married person or civil partner dies, any unused portion of their nil-rate band transfers to the survivor. A widow or widower can therefore have up to £650,000 of standard nil-rate band, plus £350,000 of residence nil-rate band — £1m in total. Unmarried partners cannot use this transfer.

Gifts in the last 7 years

Gifts made within 7 years of death are added back to the estate. Gifts made in the last 3 years are taxed at the full 40%. Gifts made 3–7 years before death attract taper relief, reducing the rate to 32%, 24%, 16% and 8%.

The charity reduced rate

If 10% or more of the net estate passes to a qualifying UK charity, the IHT rate on the rest falls from 40% to 36%. For larger estates this can save more than the value of the charitable gift.

What this calculator does not include: trusts, business property relief, agricultural property relief, the precise taper relief on year-by-year gifts, non-UK domicile rules, pensions and life-insurance policies held in trust (which usually sit outside the estate). For estates close to or above £1m, the savings available with proper planning are typically five figures.

How a will reduces IHT exposure

A properly structured will doesn't avoid IHT — it makes sure your estate uses every allowance you're entitled to. The most common avoidable IHT costs come from:

Not leaving the home to direct descendants. Bypassing the £175,000 residence nil-rate band costs up to £70,000 for a single person, £140,000 for a married couple.
Failing to claim the transferable nil-rate band on the second death of a married couple — common when the executor doesn't know to claim it.
Leaving everything to a non-spouse partner with no IHT planning — an unmarried partner inherits with no spousal exemption.
Holding pensions and life insurance inside the estate rather than in trust.

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Frequently asked questions

What is the UK Inheritance Tax threshold in 2026?: £325,000 standard nil-rate band, plus £175,000 residence nil-rate band when the main home passes to a direct descendant. Married couples and civil partners can combine and transfer allowances, taking the maximum to £1,000,000. Both bands are frozen until April 2030.
What rate is UK Inheritance Tax charged at?: 40% on the value of the estate above the available allowances. Reduced to 36% if 10%+ of the net estate is left to a qualifying charity.
How are gifts in the last 7 years treated?: Gifts made within 7 years of death can become liable for IHT. Gifts made in the last 3 years are taxed at the full 40%. Gifts made 3–7 years before death attract taper relief, reducing the rate progressively to 8%. The £3,000 annual gift exemption is separate.
Is this calculator accurate?: It applies the current HMRC 2026/27 thresholds and standard rules. It produces an estimate. It does not include trusts, business or agricultural reliefs, year-by-year gift taper, or non-UK domicile rules.
Why does the residence nil-rate band only apply to direct descendants?: The £175,000 RNRB was introduced in 2017 specifically to protect family homes passed to children and grandchildren. It does not apply when the home is left to a sibling, an unmarried partner, niece, nephew or unrelated person.
Does this calculator work for Scotland and Northern Ireland?: Yes. IHT is a UK-wide tax administered by HMRC, so the thresholds and rates are the same across England, Wales, Scotland and Northern Ireland. Intestacy and probate procedures differ — but the IHT calculation does not.

Sources & references
HMRC — Inheritance Tax rates and allowances · gov.uk/inheritance-tax
HMRC — Residence nil-rate band guidance · gov.uk/guidance/inheritance-tax-residence-nil-rate-band
HMRC — Transferring an unused IHT allowance · gov.uk/inheritance-tax/passing-on-home
HMRC — Gifts and the 7-year rule · gov.uk/inheritance-tax/gifts
HMRC — Reduced rate for charitable gifts · gov.uk/inheritance-tax/reduced-rate
Inheritance Tax Act 1984 · legislation.gov.uk
Last reviewed: 31 May 2026 by SL. Estimation tool only — not financial or legal advice.