Inheritance
Beneficiaries keep
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On £800,000 estate · IHT bill £120,000 · effective 15.0%
2026/27 rates · Last checked · Sources visible below
Estate-planning note
Complex gifts, trusts, business or agricultural relief, domicile/residence issues, pension rule changes and lifetime planning can materially change inheritance tax. Treat this as a first-pass estimate.
Where the estate goes
Effective 15.0%£680,000
£0
£120,000
£0
Allowance stack
£500,000 of estate is tax-free.
Nil-Rate Band
£325,000
Standard NRB
Residence NRB
£175,000
Home left to direct descendants
Transferable NRB
£0
0% of spouse's £325k carried forward
Transferable RNRB
£0
0% of spouse's £175k carried forward
36% reduced rate
Leaving at least £30,000 to charity (10% of the baseline above allowances) drops the IHT rate from 40% → 36%.
Minimum gift: £30,000. Resulting IHT: £79,200 (vs current £120,000).
Worth knowing
- • 7-year rule: gifts made more than 7 years before death are exempt; tapered relief applies between 3 and 7 years.
- • £3k annual gift allowance plus small-gift, wedding and normal-expenditure exemptions.
- • BPR / APR: business and agricultural property reliefs can fully or partly exempt qualifying assets.
- • Pensions currently pass IHT-free to beneficiaries (changing for deaths after April 2027).
Where your tax goes
on £120,000 inheritance tax
Illustrative allocation only - UK taxes are not ring-fenced. Approximate share of UK central government spending, applied to your inheritance tax.
Per-capita weekly welfare spend: £246.1bn (PESA 2025, Social Protection excl. state pensions) ÷ 67.6M UK population ÷ 52 weeks ≈ £70/week. This is not a Universal Credit claimant's entitlement; the standard allowance for a single adult 25+ is ~£92/week.
View source ↗£25,560
Welfare
≈ 365 weeks of welfare per citizen
Per-citizen daily NHS spend: £241.8bn (PESA 2025, Health) ÷ 67.6M ÷ 365 ≈ £9.80/day. The average national contribution per person per day, not the cost of any specific treatment.
View source ↗£25,080
Health
≈ 2,559 days of NHS care (per citizen)
New State Pension full rate, 2026/27: £241.05/week (4.7% triple-lock increase from April 2026). HMRC sources the £137.8bn pensions outturn from OBR March 2025.
View source ↗£14,280
State Pensions
≈ 59 weeks of state pension
£124.7bn in 2024/25 of interest on UK government gilts. Rose sharply from 2022 with higher interest rates and inflation-linked gilts. Now larger than the entire defence budget.
View source ↗£12,960
National Debt Interest
DfE per-pupil revenue funding (~£7,400/year for state schools) ÷ 195 school days ≈ £38/day. A blended primary/secondary average. Total education spend in HMRC's category (£118.7bn) also covers higher education, further education, and early years.
View source ↗£12,360
Education
≈ 325 school days funded
£63.6bn in 2024/25. UK defence spending is committed to rise from ~2.3% of GDP toward 2.5% by 2027.
View source ↗£6,600
Defence
Categories and shares from HMRC's 2024/25 Annual Tax Summary methodology (PESA 2025 + OBR March 2025). Last reviewed 2026-04-29.
+ £23,280 across public order & safety, transport, business & industry and 6 more
Use this if
- You want a first-pass UK IHT estimate for an estate.
- You want to see NRB, RNRB, transferable bands and charity relief.
- You are sense-checking how allowances stack.
Not for
- Trusts, complex lifetime gifts or domicile/residence questions.
- Business Property Relief, Agricultural Property Relief or bespoke estate planning.
- Final probate or filing figures.
Estimates for illustrative and educational purposes only. Calculations use HMRC published rates and are not regulated financial, tax, or legal advice. Verify against your own tax position before filing or making financial decisions.