How much can you leave before inheritance tax is due?

Everyone has a tax-free allowance of £325,000, called the nil-rate band. If you leave your home to your children or grandchildren, you can get an extra £175,000 on top, bringing it to £500,000. Inheritance tax only applies to the part of an estate above your available allowances.

What rate is inheritance tax charged at?

It is 40% on the value above your allowances. That falls to 36% if at least 10% of the taxable estate is left to charity. Anything left to a spouse or civil partner is exempt, whatever the amount.

Can a married couple combine their allowances?

Yes. Whatever you leave to a spouse or civil partner passes tax-free, and any allowance they do not use transfers to the survivor. Between them, a couple can potentially pass on up to £1 million — two £325,000 standard allowances plus two £175,000 home allowances — before any tax is due.

Does leaving my home to my children help with inheritance tax?

It can. The £175,000 home allowance, known as the residence nil-rate band, only applies when a home passes to direct descendants such as children, grandchildren, or their spouses. It is not given automatically, and it tapers away on larger estates: for every £2 the estate is worth above £2 million, you lose £1 of it.

Are gifts I make during my lifetime taxed?

They can be. Most gifts become completely tax-free if you live for seven years after making them. If you die within that period they may count against your allowance, though the tax on larger gifts can reduce on a sliding scale between years three and seven. This calculator gives a snapshot of the estate and does not model lifetime gifts.

Are pensions counted as part of my estate for inheritance tax?

For 2025-26, most pensions sit outside the estate for inheritance tax. This is set to change — from April 2027, most unused pension funds are due to be brought within scope. Only add a pension value in the calculator if it is expected to form part of the estate.

Inheritance Tax Calculator 2025–26

What's in the estate?

Enter rough values — you can refine them later. Figures update as you type.

MAIN HOME VALUEUse the estimated market value

Other Property ValueInclude buy-to-let, holiday homes or other property interests

CASH & SAVINGSInclude current accounts, savings accounts, Premium Bonds and cash ISAs

INVESTMENTSInclude shares, funds, investment ISAs and general investment accounts

Personal possessionsInclude cars, jewellery, art, collections and other valuable possessions

Life InsuranceOnly include policies that are not written in trust

PENSIONSMost pensions are normally outside the estate for 2025–26. Only include amounts expected to form part of the estate.

Business or agricultural assetsEnter the gross value here. Add any confirmed relief separately below.
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OTHER ASSETSInclude any other assets not listed above

Will the main home pass to children, grandchildren or other direct descendants?This unlocks the extra residence allowance (up to £175,000). It doesn't apply automatically.

Debts & Costs

These reduce the estate before any tax is worked out.

mortgage balance(s)Include all outstanding mortgage balances

Other debtsInclude loans, credit cards and other repayable debts

FUNERAL COSTSUse the estimated market value

Advanced Options

Spouse & charity gifts, inherited allowances

Amount passing to spouse or civil partnerThe value of the estate expected to pass to a spouse/civil partner

AMOUNT PASSING TO CHARITYThe value expected to pass to registered charities

I'm widowed and inherited unused allowances from my late spouse or civil partner.This can double the tax-free thresholds. Usually 100% if they left everything to you.

Spouse's unused standard allowanceIf your late spouse left everything to you, this is 100%. Enter a lower figure only if some of their £325,000 allowance was used when they died.

Spouse's unused home allowanceUsually 100% if they left their share of the home to you or to your children. Lower it only if part of their £175,000 residence allowance was already used.

Your Results

RESULT

Inheritance tax estimate

Calculation breakdown

2025–26 estimate

	Gross estate Total value of the assets entered above.	£0
−	Debts and costs Mortgage, other debts and funeral costs.	£0
=	Net estate before exemptions Estate value after deducting debts and costs.	£0
−	Spouse or civil partner exemption Amount expected to pass to a spouse or civil partner.	£0
−	Charity exemption Amount expected to pass to registered charities.	£0
=	Estate after exemptions and reliefs Remaining estate before tax-free allowances.	£0
−	Nil-rate band used The standard inheritance tax-free allowance used by the estate.	£0
−	Residence nil-rate band used May apply where a qualifying home passes to direct descendants.	£0
	Residence band lost to taper Shown where the estate exceeds the taper threshold.	£0
=	Taxable estate The part of the estate potentially subject to inheritance tax.	£0
×	Tax rate applied Usually 40%, or 36% if the estate qualifies for the reduced charity rate.	40%
=	Estimated inheritance tax A simplified estimate based on the figures entered.	£0
	Effective IHT rate Estimated tax as a percentage of the net estate before exemptions.	0%