UK Inheritance Tax Calculator 2025/26 — IHT with NRB & RNRB
Calculate UK Inheritance Tax (IHT) for 2025/26. Includes nil-rate band (£325,000), residence nil-rate band (£175,000), and 40% rate. Uses pounds sterling.
£
Total value of all assets at death £
£
Exempt from IHT (spouse exemption) £
Charitable gifts are IHT exempt; 10%+ reduces rate to 36% £
Gifts to individuals that may reduce available NRB £0
Inheritance Tax (IHT)
£0
Taxable Estate
£0
Total IHT Threshold
£0
Net to Beneficiaries
IHT Calculation
How to Use This UK IHT Calculator
Enter the gross estate value in pounds sterling, deduct debts and funeral expenses, spouse assets (exempt), and charitable gifts. Select the applicable nil-rate band (standard £325,000 or transferred from a deceased spouse giving £650,000). Add the Residence Nil-Rate Band if the main home passes to direct descendants.
The charitable gift amount is checked — if it equals 10% or more of the net estate, the reduced 36% rate applies instead of 40%.
The Formula
Net Estate = Gross Estate − Debts − Spouse Exempt Assets − Charitable Gifts
Available Threshold = NRB (£325K or £650K) + RNRB (£0, £175K, or £350K) − PETs in last 7 years
Taxable Estate = MAX(0, Net Estate − Available Threshold)
IHT = Taxable Estate × 40% (or 36% if charity ≥ 10% of net estate)
Available Threshold = NRB (£325K or £650K) + RNRB (£0, £175K, or £350K) − PETs in last 7 years
Taxable Estate = MAX(0, Net Estate − Available Threshold)
IHT = Taxable Estate × 40% (or 36% if charity ≥ 10% of net estate)
Example
Estate of £900,000, single person, main residence to children (RNRB), no debts:
NRB: £325,000 + RNRB: £175,000 = Total threshold: £500,000
Taxable estate: £900,000 − £500,000 = £400,000
IHT: £400,000 × 40% = £160,000
Net to beneficiaries: £740,000
NRB: £325,000 + RNRB: £175,000 = Total threshold: £500,000
Taxable estate: £900,000 − £500,000 = £400,000
IHT: £400,000 × 40% = £160,000
Net to beneficiaries: £740,000
Extended
IHT Planning Strategies
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IHT Planning Strategies
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Frequently Asked Questions
What is the UK Inheritance Tax nil-rate band?
The nil-rate band (NRB) is £325,000 per person. Any estate value up to this threshold is taxed at 0%. The nil-rate band has been frozen at £325,000 since 2009 and is currently frozen until at least 2028. Unused nil-rate band from a deceased spouse can be transferred to the surviving spouse, giving a combined NRB of up to £650,000.
What is the Residence Nil-Rate Band (RNRB)?
The Residence Nil-Rate Band (RNRB) adds an additional £175,000 per person (in 2025/26) when a main residence is passed to direct descendants (children, grandchildren). Combined with the standard NRB, this gives individuals up to £500,000 tax-free (£1,000,000 for married couples using both NRBs and RNRBs). The RNRB tapers for estates above £2,000,000.
What is the UK Inheritance Tax rate?
The standard UK IHT rate is 40% on the estate above the nil-rate band thresholds. A reduced rate of 36% applies if you leave at least 10% of your net estate to charity. Most UK estates are not subject to IHT — only about 4% of estates pay any IHT, due to the combined effect of the NRB, RNRB, spouse exemption, and agricultural/business reliefs.
Is an inheritance from a spouse subject to UK IHT?
No. Assets left to a UK-domiciled spouse or civil partner are completely exempt from Inheritance Tax (the spouse exemption). Additionally, the deceased's unused nil-rate band is transferred to the surviving spouse. This means a married couple can effectively pass £1,000,000 (or more, using RNRB) to their children tax-free.
What are the IHT annual gift exemptions?
Key IHT gift exemptions include: the annual exemption (£3,000 per year), small gifts exemption (£250 to any number of individuals), wedding/civil partnership gifts (£5,000 from parents, £2,500 from grandparents, £1,000 from others), normal gifts out of income, and the 7-year rule for potentially exempt transfers (PETs) — gifts to individuals that become exempt if the giver survives 7 years.