Assumes the 2025/26 rates: nil-rate band £325,000, residence nil-rate band £175,000, tax rate 40%. This is an estimate only — not tax advice.
Inheritance tax due
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How UK inheritance tax works
IHT is charged on everything you own above certain allowances when you die.
Nil-rate band
The first £325,000 of an estate is tax-free. Unused allowance can transfer between spouses.
Residence NRB
An extra £175,000 relief when a home is left to children or grandchildren — with tapering for estates over £2M.
40% rate
Everything above the combined allowances is taxed at 40% — or 36% if 10%+ of the estate is left to charity.
Key exemptions
Not everything counts toward your estate.
- • Spouse exemption — anything left to a spouse or civil partner is exempt from IHT.
- • Annual gift allowance — £3,000 per year is exempt, plus small gifts of £250.
- • Potentially exempt transfers — gifts made more than 7 years before death are usually exempt.
- • Charity — gifts to UK charities are exempt and can lower the rate on the rest to 36%.
More UK tax tools
Explore our full range of UK-focused tax calculators.
Open Tax Calculators