What this calculator does
Takes estate value, whether the main home is passed to direct descendants, whether a deceased spouse's unused allowances are available, and charitable gifts. Returns IHT due.
The formula
Nil-rate band (NRB): £325,000 Residence nil-rate band (RNRB): £175,000 (only applies if main home passes to direct descendants) RNRB tapers by £1 for every £2 the estate exceeds £2,000,000 Transferred NRB/RNRB: unused % of deceased spouse's bands can be claimed on the survivor's death Threshold = NRB + RNRB (where applicable) + any transferred bands Taxable estate = max(0, net estate − threshold) IHT = taxable estate × 40% Reduced rate (36%) if ≥ 10% of net estate is left to qualifying charities
Assumptions
- Does not model business property relief (BPR) or agricultural property relief (APR).
- Does not model the seven-year rule for gifts (see Limitations).
- Charitable gifts are deducted from the net estate before calculating the taxable amount.
Data sources
| Figure | Value used | Source | Last checked |
|---|---|---|---|
| Nil-rate band | £325,000 | HMRC — Inheritance Tax thresholds | May 2026 |
| Residence nil-rate band | £175,000 | HMRC — Inheritance Tax: passing on home | May 2026 |
| Standard rate | 40% | HMRC — Inheritance Tax rates | May 2026 |
| Reduced charitable rate | 36% | HMRC — Inheritance Tax and charity | May 2026 |
| RNRB taper threshold | £2,000,000 | HMRC — Inheritance Tax: residence nil rate band | May 2026 |
Limitations
- Does not model the seven-year rule for gifts: gifts made more than seven years before death are exempt, and taper relief applies in years three to seven.
- Does not cover business property relief (BPR) or agricultural property relief (APR).
- Does not model trusts.
- The RNRB is not available if no main home is left to direct descendants.
Worked example
Single person, estate £800,000 including a main home worth £300,000 left to children, no prior gifts.
NRB: £325,000 RNRB: £175,000 (home to children; estate below £2m) Total threshold: £500,000 Taxable estate: £800,000 − £500,000 = £300,000 IHT: £300,000 × 40% = £120,000
Changelog
| Date | Change |
|---|---|
| May 2026 | Initial publication |