Inheritance Tax Calculator - find out what you owe in minutes.

HMRC charges Inheritance Tax at 40% on the value of an estate above the available tax-free threshold. The calculation follows five steps: value all assets and deduct debts; remove exempt assets (spouse exemption, charities, qualifying business assets); subtract the Nil-Rate Band (£325,000 per person, or £650,000 if a transferable NRB is available from a deceased spouse); subtract the Residence Nil-Rate Band if a home passes to direct descendants; then charge 40% on whatever remains. If 10% or more of the estate goes to charity, the rate on the rest drops to 36%.

The Inheritance Tax threshold (the Nil-Rate Band) is £325,000 per person for 2026/27. It has been frozen at this level since 2009 and is now frozen until April 2031, meaning more estates are pulled into the IHT net each year as property values and savings rise.

Married couples and civil partners can combine allowances, potentially sheltering up to £650,000 in NRB. An additional Residence Nil-Rate Band of up to £175,000 per person applies when a main home passes to children or grandchildren, taking a couple's combined potential threshold to £1 million.

The executor (or administrator where there is no Will) pays Inheritance Tax out of the estate's own funds before distributing anything to beneficiaries. Beneficiaries do not pay IHT directly on what they inherit - the estate settles the bill first.

In Scotland, IHT is generally required to be paid before Confirmation is granted by the Sheriff Court. In England and Wales, IHT is usually paid before the Grant of Probate is issued. This can create a practical problem if the estate's main asset is a property, since the money to pay HMRC must come from somewhere before the property can be sold.

Beneficiaries do not pay IHT directly on a house they inherit. Instead, the estate pays IHT before assets are distributed. If the estate's total value exceeds the available thresholds, the estate must pay 40% IHT on the excess - out of the estate's liquid assets or from the sale of the property - before the house or its sale proceeds can be passed to beneficiaries.

If the house passes to children or grandchildren, the Residence Nil-Rate Band (up to £175,000 per person) can significantly reduce or eliminate the IHT bill on that property.

Inheritance Tax must be paid within 6 months of the end of the month in which the person died. HMRC charges interest on any unpaid amount after this deadline.

In practice, IHT is usually required before Confirmation (Scotland) or a Grant of Probate (England and Wales) will be issued - which can mean funding is needed from the estate before the executor has full access to its assets. Our Executor's Calculator shows the relevant deadline based on your jurisdiction.

Yes. Inheritance Tax rates and thresholds are set by the UK government and are identical in Scotland, England, and Wales. A Scottish estate pays the same 40% rate and benefits from the same Nil-Rate Band and Residence Nil-Rate Band as an English one.

What differs is the legal process for administering an estate. Scotland uses Confirmation, obtained from the Sheriff Court, rather than a Grant of Probate. Scotland also has its own legal rights framework (Prior Rights and Legal Rights) which affects how an estate is distributed, though not how IHT is calculated. Jones Whyte's team is dual-qualified and handles estates in both jurisdictions.

Gifts of money, property, or assets made more than 7 years before death are fully exempt from Inheritance Tax. They are known as Potentially Exempt Transfers (PETs). Gifts made within 7 years of death may be drawn back into the estate and taxed.

Taper relief reduces the IHT rate on gifts made between 3 and 7 years before death: 20% reduction at 3–4 years, 40% at 4–5 years, 60% at 5–6 years, and 80% at 6–7 years. Gifts in the final 3 years attract the full 40% rate. Both calculators include a gift section where you can enter the amount and timing of any significant gifts.

Yes. Inheritance Tax cannot be avoided outright, but it can be significantly reduced through legal planning. The most effective strategies include leaving assets to a surviving spouse or civil partner (fully exempt); making structured gifts more than 7 years before death; leaving 10% or more of the estate to charity (which reduces the rate to 36%); claiming Business Property Relief or Agricultural Property Relief on qualifying assets; writing life insurance in trust so it falls outside the estate; and using discretionary or life interest trusts.

The earlier planning begins, the more options are available. Our Estate Planning Calculator identifies which strategies are likely to apply to your situation. For full advice, our Inheritance Tax Planning team can structure a plan around your specific circumstances.

Currently, most defined contribution pension funds sit outside your estate and are not subject to Inheritance Tax. This has made pensions a popular estate planning tool.

However, from April 2027, pension funds will be brought into the scope of IHT under changes announced in the Autumn Budget 2025. This is a significant shift that could substantially increase the IHT liability for people with large pension pots. If you have significant pension savings, we strongly recommend taking professional advice now rather than waiting for the change to take effect.

If the estate doesn't have enough liquid assets to pay the IHT bill upfront, there are options. HMRC allows IHT on certain assets (including property, business interests, and agricultural land) to be paid in instalments over 10 years, rather than as a lump sum. Interest accrues on the outstanding balance.

It is also possible to use funds from the estate's bank accounts to pay IHT before probate or Confirmation is granted, as some banks will release funds directly to HMRC for this purpose. Our Bereavement team can advise on the best approach for the estate's specific circumstances.