Care & Will Planning2 min check

Inheritance Tax Exposure Calculator

Estimate IHT exposure on a UK estate using the £325k nil-rate band, £175k residence nil-rate band and spousal transfers.

Short answer

UK Inheritance Tax (IHT) is 40% on estate value above the £325,000 nil-rate band. Add the £175,000 Residence Nil-Rate Band if you leave a home to direct descendants — total £500,000 per person, or £1 million for a couple. Spouses inherit tax-free and can transfer unused allowances. Gifts more than 7 years before death are usually exempt; tapered relief applies between 3–7 years.

Step 1 of 10%

How it works

The estimator sums your estate (property + investments + savings + pensions outside the death-tax shield from April 2027), subtracts allowances (NRB + RNRB + spouse transfer + charity), then applies 40% to the excess. RNRB tapers above £2m estate (lost £1 for every £2 over).

Worked example

Widow with £750,000 home + £400,000 ISAs/savings = £1.15m estate. Allowances: £325k NRB + £175k RNRB + transferred spouse's £325k + £175k = £1m. Taxable: £150k × 40% = £60,000 IHT.

Who should use this

•Anyone with an estate over £325,000
•Couples planning around the £1m joint allowance
•Parents giving early gifts to children
•People considering trusts or business relief

Common mistakes

×Forgetting that pensions move into IHT scope from April 2027
×Losing RNRB by leaving the home to nieces/nephews instead of children
×Making large gifts and dying within 7 years
×Not using the £3,000 annual gift exemption each year

Frequently asked questions

Is life insurance counted?▾

Yes unless written in trust — then it pays out outside the estate.

Can I give my house to my kids?▾

Yes but if you keep living there it's a 'gift with reservation' and stays in your estate.

What about charity gifts?▾

Estates leaving 10%+ to charity get a reduced IHT rate of 36%.

Related calculators

Care Home Fees Calculator →Later Life Planning Checklist →LPA Checker →Capital Gains Tax Calculator →