Inheritance Tax Calculator (IHT)

Inheritance Tax (IHT) Calculator

Estimate your UK estate tax liability based on your assets, deductions, and available tax-free allowances.

Estate Assets
£
£
£
Deductions & Exemptions
£
Deducted before tax calculation.
£
Assets left to spouse/charity are tax-free.
Allowances & Thresholds
Grants an extra £175,000 allowance (Residence Nil Rate Band).
Doubles standard allowances by transferring unused threshold from late partner.
Estimated Inheritance Tax Bill
£0
Standard Rate: 40%
Estate Breakdown
Total Gross Assets £525,000
Less Debts & Liabilities -£100,000
Less Spouse/Charity Exemptions -£0
Net Estate Value £425,000
Standard Tax-Free Threshold (NRB) £325,000
Residence Threshold (RNRB) Applied £100,000
Total Tax-Free Allowance Used £425,000
Taxable Estate £0

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An Inheritance Tax (IHT) Calculator is a financial planning tool that helps estimate how much UK Inheritance Tax may be payable when a person dies. It provides an overview of the potential tax liability by considering the value of the estate, including property, savings, investments, personal possessions, and certain lifetime gifts.

How It Is Calculated

The calculator typically considers:

  • Total estate value – property, cash, investments, vehicles, and other assets.
  • Outstanding debts and liabilities – eligible debts may reduce the taxable estate.
  • Nil-rate band – the amount that can generally pass without IHT.
  • Residence nil-rate band – an additional allowance that may apply when a qualifying home is passed to direct descendants.
  • Gifts made during the person’s lifetime – certain gifts may affect the available allowances or become relevant if the donor dies within seven years.
  • Exemptions and reliefs – transfers to a spouse or civil partner and certain qualifying assets may receive tax exemptions or reliefs.

Basic calculation:

Taxable Estate = Total Estate − Allowances − Exemptions − Allowable Liabilities

Estimated IHT = Taxable Estate × Applicable Tax Rate

Example

Suppose a person’s estate is worth £800,000 and, for a simplified example, £325,000 of the estate is covered by the available nil-rate band:

£800,000 − £325,000 = £475,000 taxable estate

If the applicable IHT rate is 40%:

£475,000 × 40% = £190,000 estimated IHT

The actual amount could be lower or higher depending on factors such as the residence nil-rate band, gifts, spouse or civil-partner exemptions, charitable donations, and other available reliefs.

An IHT Calculator is useful for estate planning, understanding potential tax exposure, comparing different scenarios, and preparing for future inheritance-related costs. Since UK tax rules and allowances can change, calculator results should be treated as estimates rather than professional tax advice.