What is the standard Inheritance Tax rate in the UK?

The standard Inheritance Tax (IHT) rate is 40%. It's only charged on the part of your estate that's above your tax-free threshold (usually £325,000, but can be higher).

Do spouses or civil partners pay Inheritance Tax?

No. You can pass everything you own to your husband, wife, or civil partner completely free of Inheritance Tax, regardless of the amount.

What is the Residence Nil-Rate Band (RNRB)?

If you leave your main home to 'direct descendants' (children, step-children, or grandchildren), your tax-free threshold increases by up to £175,000. So a single person could have a threshold of £500,000, and a married couple could have £1,000,000.

What happens if I give my money away before I die?

Gifts given while you're alive might still be subject to IHT if you die within 7 years of making them. If you live longer than 7 years, the gift is generally tax-free. There are also smaller annual exemptions you can use.

What is the standard Inheritance Tax rate in the UK?

The standard Inheritance Tax (IHT) rate is 40%. It's only charged on the part of your estate that's above your tax-free threshold (usually £325,000, but can be higher).

Do spouses or civil partners pay Inheritance Tax?

No. You can pass everything you own to your husband, wife, or civil partner completely free of Inheritance Tax, regardless of the amount.

What is the Residence Nil-Rate Band (RNRB)?

If you leave your main home to 'direct descendants' (children, step-children, or grandchildren), your tax-free threshold increases by up to £175,000. So a single person could have a threshold of £500,000, and a married couple could have £1,000,000.

What happens if I give my money away before I die?

Gifts given while you're alive might still be subject to IHT if you die within 7 years of making them. If you live longer than 7 years, the gift is generally tax-free. There are also smaller annual exemptions you can use.

HM Revenue & Customs Rules Applied

Inheritance Tax Calculator

Plan your legacy. Estimate the potential 40% tax bill on your estate and see how your tax-free allowances can protect your family's wealth.

Estate Details

Enter the value of assets to be passed on

Total Value of Estate (£)

Include property, savings, stocks, and valuable possessions.

Main Residence Value (£)

How much of the total estate is made up of your main home?

Are you married or in a civil partnership?

Spouses can pass on their £325k allowance if unused, doubling your tax-free limit.

Are you leaving your home to direct descendants?

e.g., Children or grandchildren. This unlocks the Residence Nil-Rate Band (£175k).

Awaiting Estate Data

Enter your total estate value and home worth to see your potential tax liability.

7-Year Gift Rule

Have you given away large sums of money recently? Gifts given within 7 years of death may still be subject to Inheritance Tax on a sliding scale.

A Plain English Guide to IHT

The Dreaded 40% Tax

Inheritance Tax is a tax on the estate (the property, money, and possessions) of someone who's died. It is famously unpopular, but you only pay the 40% rate on the parts of your estate that sit ABOVE your tax-free allowances.

The Allowances We All Get

The Basic Rate Band: £325,000Every single person in the UK gets this allowance tax-free.
The Residence Band: +£175,000Added if you give your main home to your children or grandchildren.

The Power of Marriage

For Inheritance Tax, marriage is incredibly powerful. Any assets passed to a spouse are completely tax-free. Furthermore, the surviving spouse inherits whatever percentage of the late partner's tax-free allowance went unused.

The £1 Million Threshold

By combining two £325k basic allowances and two £175k residence allowances, a married couple can currently pass on exactly £1,000,000 tax-free.

The 7-Year Rule (PETs)

Potentially Exempt Transfers (PETs) mean you can gift unlimited amounts of money during your lifetime. However, if you die within 7 years of making the gift, it gets pulled back into your estate for tax calculation purposes.

Trusts and Insurance

Many wealthy families minimize IHT legally by placing assets into Trusts or using dedicated life insurance policies (written in trust) to cover the eventual HM Revenue & Customs bill, leaving the estate intact for heirs.

Inheritance Tax FAQs

Legal Disclaimer

This calculator provides estimates based on current standard rules and rates. Estate planning is highly complex and depends on your unique personal circumstances, earlier gifts, and trust setups. This tool does not constitute legal or financial advice. We strongly recommend speaking to a qualified solicitor or independent financial advisor to plan your estate.