UK Inheritance Tax Calculator 2026/27
£325,000 Nil-Rate Band, £175,000 Residence Nil-Rate Band, tapering above £2m. 40% standard rate or 36% with 10%+ charity legacy. Spouse transfer included. All figures HMRC-verified for 2026/27 (post-Autumn-Budget-2024 rules).
Your estate
Inheritance Tax due
£120,000
Rate 40% · Effective 15.0% of estate · Net to beneficiaries £680,000
- Total NRB
- £325,000
- Effective RNRB
- £175,000
- Charity exempt
- £0
- Taxable estate
- £300,000
How the calculation works
- Nil-Rate Band (NRB) = £325,000 + any unused % transferred from a late spouse or civil partner (max another £325,000).
- Residence Nil-Rate Band (RNRB) = £175,000 + any transferred spouse RNRB (max another £175,000). Applies only if the main residence passes to a direct descendant.
- RNRB taper: if the gross estate exceeds £2,000,000, the RNRB reduces by £1 for every £2 above. A single estate loses the full £175k at £2.35m; a couple's combined £350k at £2.7m.
- Charity legacy is always fully exempt. If it's ≥10% of the net estate (estate − NRB − RNRB), the reduced 36% rate applies to the rest; otherwise 40%.
- IHT due = (estate − NRB − RNRB − charity) × applicable rate.
Autumn Budget 2024 — what changed for 2026/27
- APR & BPR £2.5m cap (from 6 April 2026): 100% Agricultural Property Relief and Business Property Relief is capped at a combined £2.5m (raised from the originally proposed £1m). Above the cap, relief drops to 50%. Specialist territory — farmers and business-owners should consult an IHT adviser.
- Pensions into the estate (from 6 April 2027, NOT 2026/27): most unused pension funds and death benefits will count toward IHT. A huge estate-planning change, but does not affect 2026/27 calculations — this tool follows the rules in force today.
- Thresholds frozen to April 2030: NRB £325k and RNRB £175k locked in since 2020. Fiscal drag means more estates are being caught each year as asset prices rise — 2026/27 is no exception.
Related calculators
Capital Gains Tax →
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Mortgage Affordability →
Property is usually the biggest estate asset. Plan for your children's next buy with our affordability tool.
Pension Contribution →
Pensions stay outside IHT in 2026/27 (changing from 2027). Maximise sheltered pension pots while you can.
Salary Take-Home →
Estate-planning starts with income-planning. See your exact take-home and plan gifts within the £3,000 annual exemption.
Sources
- HMRC — Inheritance Tax overview (retrieved 20 April 2026)
- HMRC — Passing on a home (RNRB + tapering)
- HMRC — APR / BPR changes from 6 April 2026 (£2.5m cap confirmed)
- HM Treasury — £2.5m relief threshold announcement
- HMRC — Gifts and the 7-year rule (PETs, not modelled here but relevant for estate planning)
FAQ
- What is the UK Inheritance Tax threshold for 2026/27?
- The Nil-Rate Band (NRB) is £325,000 — frozen until April 2030. If you pass your main residence to direct descendants (children, stepchildren, grandchildren), an additional Residence Nil-Rate Band (RNRB) of £175,000 applies, bringing the combined threshold to £500,000 for a single person or up to £1 million for a couple with full spouse transfer.
- What is the Inheritance Tax rate?
- 40% on anything above the available threshold. A reduced 36% rate applies if 10% or more of the net estate is left to charity — a meaningful saving for larger estates. The charity amount itself is always exempt (0% IHT on charity legacies regardless of proportion).
- How does RNRB tapering work?
- If the total estate value exceeds £2,000,000, the RNRB tapers by £1 for every £2 above the threshold. A single person loses the full £175,000 RNRB at £2,350,000. A couple with both RNRBs combined loses the full £350,000 at an estate value of £2,700,000. This is why some estate planning focuses on getting total assets below £2m.
- Can unused spouse allowances transfer to me?
- Yes — when a spouse or civil partner dies leaving unused NRB or RNRB, 100% of the unused percentage passes to the survivor's estate. A widow who inherits everything tax-free can use a combined £1 million threshold (2× NRB + 2× RNRB) if she passes the main residence to direct descendants and the estate is below £2m.
- What changed in the Autumn Budget 2024?
- Agricultural Property Relief (APR) and Business Property Relief (BPR): from 6 April 2026, 100% relief is capped at the first £2.5 million of combined agricultural and business assets (raised from the originally proposed £1m). Relief above £2.5m drops to 50%. This calculator assumes standard estate assets — farmers and business owners should consult a specialist.
- Are pensions included in the estate for IHT?
- Not in 2026/27 — most defined contribution pension funds remain outside the IHT estate. From 6 April 2027, the government plans to bring most unused pension funds and death benefits into the IHT estate. This is a major change for estate planning but doesn't affect 2026/27 calculations (this tool follows 2026/27 rules).
- What assets count in the estate?
- Everything you own minus debts: property (main home + second homes), cash and savings, investments (shares, bonds, ISAs — yes, ISAs are in the estate), valuables (jewellery, art, cars), business interests, agricultural land, and life insurance NOT written in trust. Outgoings reducing it: mortgages, loans, unpaid bills, funeral costs.
- When does IHT need to be paid?
- IHT must usually be paid within 6 months of the end of the month of death, or HMRC charges interest on the unpaid balance. Executors must also submit an IHT400 form within 12 months. Residential property can be paid by 10 yearly instalments, but interest still accrues. Grant of probate is usually issued only after IHT has been at least partly paid.