Inheritance Tax Calculator UK 2026/27
Inheritance Tax Calculator UK 2026/27
Beneficiaries keep
On £800,000 estate · IHT bill £120,000 · effective 15.0%
2026/27 rates · Last checked · Sources in page details
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
Categories and shares come from HMRC's 2024/25 Annual Tax Summary methodology, using PESA 2025 and OBR March 2025 figures. The government does not set aside your exact tax for these areas, so this is only an estimate. Last reviewed 29 April 2026.
View source ↗on £120,000 inheritance tax
This is an estimate. The government does not set aside your exact tax for these areas.
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
+ £23,280 across public order & safety, transport, business & industry and 6 more
Estimates onlyShowHide
Calculations use HMRC published rates for education and illustration. They are not regulated financial, tax, or legal advice. Verify against your own tax position before filing or making financial decisions.
Background reading
UK inheritance tax: what you actually pay
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Background reading
UK inheritance tax: what you actually pay
IHT is charged at 40% on estates above the £325,000 Nil-Rate Band, with an extra £175,000 allowance when a home passes to direct descendants. Spouses can transfer unused allowances, taper applies to large estates, and a 10% charitable bequest drops the rate to 36%.
What is the UK inheritance tax threshold for 2026/27?
The standard Nil-Rate Band is £325,000 per person. If you leave your home to direct descendants you also get the £175,000 Residence Nil-Rate Band, taking the total to £500,000 per person.
What is the transferable Nil-Rate Band?
When the first spouse or civil partner dies, any unused proportion of their NRB and RNRB can transfer to the surviving partner. A couple can therefore pass on up to £1m completely tax free in many cases.
Why does the Residence Nil-Rate Band reduce above £2m?
RNRB tapers by £1 for every £2 above the £2,000,000 estate threshold. By £2.35m it's fully withdrawn. Lifetime gifting that reduces the estate below £2m can fully restore it.
How does the 10% charity rule reduce IHT to 36%?
If at least 10% of your taxable estate (after NRB/RNRB) is left to a registered UK charity, the IHT rate on the rest drops from 40% to 36%. Many estates that already plan to leave anything to charity are better off topping up to the 10% threshold.
What is the seven-year rule on gifts?
Lifetime gifts become fully exempt from IHT once you survive seven years. Between three and seven years, taper relief reduces the tax owed on the gift sliding from 80% to 20% of the standard rate.