UK Inheritance Tax Calculator 2026/27 – Estimate IHT

UK Inheritance Tax Calculator 2026/27 – Estimate IHT on an Estate

Use this simplified UK Inheritance Tax calculator to explore the £325,000 nil-rate band, the residence nil-rate band of up to £175,000, transferable allowances from a late spouse or civil partner, the £2 million residence-band taper and the standard 40% estate rate.

Estimate potential Inheritance Tax

Illustrative Inheritance Tax
£40,000
Estimated estate after this IHT: £560,000
Nil-rate band used
£325,000
Residence nil-rate band used
£175,000
Modelled IHT rate
40%

Inheritance Tax thresholds for 2026/27

The standard Inheritance Tax nil-rate band is £325,000. The maximum residence nil-rate band (RNRB) is £175,000. These thresholds remain at those levels for 2026/27. A qualifying individual estate can therefore potentially have up to £500,000 of combined nil-rate bands, but the £175,000 residence amount is conditional rather than automatic.

The standard rate of IHT on the taxable part of an estate on death is 40%. A reduced 36% rate can apply to an estate that meets the statutory test for leaving at least 10% of the relevant net estate to charity.

When does the £175,000 residence nil-rate band apply?

The residence nil-rate band can apply when a qualifying residence is included in the estate and is inherited by qualifying direct descendants. It is not simply an extra £175,000 allowance for every homeowner with children.

The amount available is limited by several factors, including the maximum RNRB, the value of the qualifying residence inherited by direct descendants, and the taper for estates above £2 million. HMRC also has special rules covering downsizing and disposal of a former home.

What counts as a direct descendant?

The detailed rules extend beyond biological children. HMRC’s rules can include children, grandchildren and other lineal descendants, and can also cover certain stepchildren, adopted children and foster children. The way property is inherited can matter, particularly where trusts are involved.

The £2 million taper

If the estate’s value for the RNRB taper exceeds £2 million, the available residence nil-rate band is reduced by £1 for every £2 over £2 million. This can eventually remove the RNRB entirely. The taper applies to the residence allowance, not the ordinary £325,000 nil-rate band.

Transferable allowances for spouses and civil partners

If a spouse or civil partner dies without using all of their nil-rate band, the unused percentage can potentially be transferred to the surviving spouse or civil partner’s estate. The same broad principle can apply to unused residence nil-rate band.

That means a qualifying surviving spouse or civil partner’s estate can potentially have a nil-rate band of up to £650,000 and residence nil-rate band of up to £350,000 — up to £1 million combined where all the conditions are met. The calculator lets you enter the percentage of each band transferred rather than automatically assuming 100%.

Transfers to a spouse or civil partner

Transfers between spouses or civil partners are often exempt from Inheritance Tax, but the rules are more nuanced than a universal “everything to spouse = always zero” switch. Since April 2025, long-term UK residence can affect the spouse/civil-partner exemption in some cross-border situations. The checkbox above is therefore an explicit simplified assumption that the whole transfer qualifies for exemption.

Example: £600,000 estate

Suppose a £600,000 net estate has a qualifying residence worth at least £175,000 passing to direct descendants, no transferred allowances, no relevant lifetime gifts and no other reliefs or exemptions. A £325,000 NRB plus £175,000 RNRB gives £500,000 of modelled nil-rate bands. The remaining £100,000 at 40% produces an illustrative IHT figure of £40,000. This matches the supplied calculator’s benchmark. fileciteturn24file0L188-L191

Why this is only an estimate

Real IHT calculations can be substantially more complicated. The tax position can be affected by lifetime gifts and the seven-year rules, gifts with reservation, trusts, charitable gifts, debts and liabilities, business or agricultural reliefs, foreign assets, pensions, jointly owned property, residence status, downsizing provisions, previous transfers and the exact terms of a will.

This calculator deliberately does not recommend gifts, trusts or asset transfers as tax-saving strategies. Those decisions can have tax, legal, care-fee, control and family consequences and may require regulated or professional advice.

Pensions and IHT are changing

Do not assume every pension is permanently outside the estate. Government changes are due to bring most unused pension funds and death benefits into the scope of Inheritance Tax from 6 April 2027. This 2026/27 calculator should therefore not be used to project the IHT position for deaths in later tax years without checking the rules then in force.

Official guidance

Related MoneySavvyUK calculators

2026/27 rules checked: 5 October 2026. This is a simplified educational estimate, not legal, tax, estate-planning or financial advice. For an estate with significant assets, lifetime gifts, trusts, business/agricultural assets, cross-border issues or uncertainty over allowances, consider professional advice and HMRC guidance.