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Estimate the inheritance tax on an estate in England and Wales under the rules in force now — including the changes most calculators have not caught up with: the £2.5 million farm and business allowance, and pensions counting from 6 April 2027.
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The calculator follows the order HMRC applies the rules in.
A widow dies in 2028 leaving a £600,000 home and £900,000 of savings to her two children, plus a £400,000 pension. Her husband died first and left everything to her.
Because of the pension, her estate is £1.9 million: under the £2 million taper, so she keeps both residence bands. With both nil-rate bands transferred, she has £1 million of allowances, and £900,000 is taxed at 40% — £360,000. Had she also held a £400,000 life policy outside trust, the estate would reach £2.3 million, the taper would take £150,000 of residence band, and the bill would rise by £220,000: £160,000 on the policy itself and £60,000 for the lost allowance.
If any of those apply, treat the figure as a lower bound on how complicated the real answer is, and take advice from a solicitor or a chartered tax adviser.
Everyone has a £325,000 nil-rate band. If a home you lived in passes to children or grandchildren, the residence nil-rate band adds up to £175,000 more. A married couple or civil partners can pass unused allowances to the survivor, so up to £1 million can pass free of tax on the second death, provided the estate is under £2 million and the home goes to direct descendants.
It tapers away by £1 for every £2 the estate is worth above £2 million, measured before reliefs and exemptions. A single allowance of £175,000 is gone by £2.35 million; a doubled allowance of £350,000 is gone by £2.7 million. A life policy not written in trust, or from April 2027 a pension, can push an estate over the threshold.
For deaths on or after 6 April 2027, most unused pension funds and pension death benefits count as part of the estate. Pensions left to a spouse or civil partner stay exempt, and death-in-service benefits are excluded. Before that date they are outside the estate, which is why this calculator asks for the date of death.
If at least 10% of the baseline amount goes to charity, the rate drops from 40% to 36%. For a simple estate the baseline is the estate after exemptions and reliefs, less the nil-rate band left after gifts, plus the charitable gift. The test is all or nothing, so a gift just below 10% is the worst of both worlds.
From 6 April 2026 it is £2.5 million per estate. The reform announced in 2024 set it at £1 million, but the government raised it on 23 December 2025, and at Budget 2025 made it transferable between spouses. Above the allowance relief is 50%. Qualifying AIM shares get 50% relief with no allowance at all.
It is an estimate for a single estate in England and Wales. It does not model trusts, jointly owned property passing by survivorship, the downsizing addition, gifts with reservation, grossing up or quick succession relief. Use it to understand the shape of the bill, then have a solicitor or chartered tax adviser do the real calculation.
This calculator is general information for a United Kingdom audience and describes the inheritance tax rules of England and Wales. It is not financial, tax or legal advice, and its result is an estimate. Thresholds change, and the position of any particular estate depends on its assets, the family circumstances and the terms of any will or trust. See the disclaimer.