Inheritance Tax Calculator UK 2023-24
Estimate your inheritance tax liability with our free calculator below.
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Estimate your inheritance tax liability with our free calculator below.
Sign up for freeAre you concerned about how much you might owe in inheritance tax (IHT) in the UK? You're not alone. Understanding IHT and planning accordingly can be daunting, but we're here to help. Our comprehensive inheritance tax calculator is designed to offer you accurate estimates and peace of mind.
Our inheritance tax calculator can help you estimate how much you or your estate may owe in inheritance tax when the time comes. All you need to do is enter basic information, such as the size of the estate, and our calculator will crunch the numbers and provide precise figures. That way, you can plan and better understand what kind of taxes you or your estate might owe in the future.
Our calculator has been updated for 2023-24. Complete the boxes below in the calculator to estimate how much your family could be liable to pay in IHT tax to HMRC when you die.
Please note that this is an estimation of your IHT liability and only shows liabilities for individuals. IHT can be complex and as such, we would advise that you speak to a financial adviser if you have any concerns.
Potential inheritance tax bill:
Net estate value:
Your assets, less debts and charitable donations
Assets above the inheritance tax threshold:
The amount on which you may be charged IHT,
before factoring in the new property
allowance.
Less main residence nil rate band:
The amount on which you may be charged IHT,
after factoring in the property allowance.
Inheritance tax rate:
If you leave more than 10% of your estate to
charity, you will be subject to a lower
inheritance tax rate.
For Individuals Only
This calculator is designed to show liabilities specifically for individuals. Assets transferred to a surviving spouse or civil partner are generally not subject to inheritance tax. Additionally, the surviving spouse can inherit their deceased partner's unused IHT allowance, effectively doubling the "nil-rate band."
Exclusions and Special Cases
For a more tailored understanding of your potential IHT liability, consult a financial advisor.
Inheritance tax (IHT) is levied on the value of the assets that you leave behind when you die, as well as some gifts made during your lifetime. This encompasses everything from property and cash to investments and valuables. In the UK, the current rate is 40% on the portion of an individual’s estate that exceeds the £325,000 "nil-rate band" threshold.
The amount owed in inheritance tax depends on various factors, including the total value of the estate, the beneficiaries, and any applied exemptions or reliefs.
Given the complexities surrounding inheritance tax, professional advice can offer strategies tailored to your specific circumstances. These may include trusts, lifetime gifts, or other forms of estate planning.
The UK offers several types of gift exemptions to help reduce inheritance tax liability, including:
Annual exemption: You can give away up to £3,000 worth of gifts each tax year without it being added to your estate for inheritance tax purposes.
Small gifts exemption: You can give as many gifts of up to £250 per person as you want each tax year, so long as you haven't used another exemption on the same person.
Wedding and civil partnership gifts: You can make gifts of varying amounts depending on your relationship to the recipient, without any inheritance tax implications.
Regular gifts from your income: If you make gifts out of your regular income that do not affect your standard of living, these gifts may be exempt from inheritance tax.
Setting up trusts can be a useful tool in reducing your inheritance tax liability. By placing assets into a trust, you can potentially remove them from your estate and reduce the overall value that will be subject to inheritance tax. Trusts can also be a way to control how your assets are distributed to your beneficiaries, providing them with financial security and ensuring your wishes are carried out.
Leaving at least 10% of your net estate to charity can reduce the inheritance tax rate from 40% to 36% on the remainder of your estate, resulting in tax savings while supporting charitable causes.
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If you are deemed to be domiciled in the UK, your worldwide assets are generally subject to UK inheritance tax. This includes real estate, bank accounts, and other forms of investment held outside the UK.
People often forget to include jointly owned assets, gifts given within the last seven years, and the value of pensions or certain life insurance policies when calculating inheritance tax. Always consult a financial adviser to ensure all assets are accounted for.
The current inheritance tax threshold in the UK is £325,000 per individual. This is often referred to as the "nil-rate band." Any part of an estate that exceeds this amount is taxed at a rate of 40%.
Yes, several exemptions and reliefs can help reduce your inheritance tax liability:
Yes, you can. Any unused portion of your £325,000 threshold can be transferred to your surviving spouse or civil partner. This can effectively double the threshold for the surviving partner, bringing it up to £650,000.
The Residence Nil-Rate Band (RNRB) is an additional allowance that specifically pertains to your main residence. If you leave your primary home to direct descendants like children or grandchildren, you could qualify for an extra £175,000 allowance, making the total individual threshold £500,000 or £1 million for married couples or civil partners.
Gifts given within seven years of your death may be subject to taper relief, which reduces the tax rate based on the time elapsed since the gift was made. The closer the gift is to the time of death, the higher the potential tax liability.
The executor or administrator of the estate usually reports and pays the inheritance tax. Payments should be made within six months after the end of the month in which the deceased passed away; otherwise, interest may accrue on the unpaid amount.
Life insurance payouts can be included in your estate and thus subject to inheritance tax, unless the policy is written in trust. By placing the policy in a trust, the payout is generally exempt from your taxable estate.
Effective strategies for reducing inheritance tax include gifting assets, setting up trusts, making charitable donations, and leveraging exemptions and reliefs, such as the spouse or civil partner exemption. Consult a financial adviser for tailored advice.
If assets are jointly owned with a spouse or civil partner, they typically pass to the surviving owner without being subject to inheritance tax. However, if the joint owner is not a spouse or civil partner, the deceased's share might be taxable.
Yes, if you've overpaid inheritance tax, you can submit a claim to HMRC within four years from the end of the tax year in which the overpayment occurred.
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