Estate Tax in the UK: Inheritance Tax Calculator and Guide for 2026/27
Estate tax in UK law is called inheritance tax. Use the calculator to estimate the bill on an estate, then see how the thresholds, the 7-year rule and the 2026 and 2027 changes work, with every figure checked on GOV.UK.
- ✓ £325,000 and £175,000 bands built in
- ✓ Covers couples, charity gifts and business relief
- ✓ Nothing you type leaves your browser
Updated 7 November 2026 · Written by Swapan Jr · Reviewed by Shamayun Chowdhury
UK estate tax (inheritance tax) calculator 2026/27
Enter rough values. Results update as you type and stay in your browser.
£0
estimated inheritance tax on the estate
Uses GOV.UK rules for 2026/27. It ignores debts, pensions from April 2027 and tax charged on the gifts themselves. A guide, not advice.
£325,000
Nil-rate band per person
£175,000
Extra band for a home left to descendants
%
Standard rate
%
Rate with 10% to charity
Is there an estate tax in the UK?
The UK has no tax called estate tax, but inheritance tax does the same job. It is charged on the estate of someone who has died, at 40% on the value above the tax-free threshold, and the executor pays it before the estate is shared out. For 2026/27 the threshold is £325,000 per person, rising to £500,000 when a home passes to children or grandchildren and up to £1 million for a married couple. Estates left to a spouse, civil partner or charity pay nothing on that share.
How much estate tax would a typical UK estate pay?
Simplified 2026/27 examples with no debts, gifts, pensions or business assets. For couples, the figure is for the second death. Press a button to load the estate into the calculator.
£400,000 estate
Single person, no home to children
£30,000
estimated inheritance tax
- ✓ Nil-rate band: £325,000
- ✓ Taxable: £75,000 at 40%
- ✓ Effective rate: 7.5%
- ✓ Executor pays from the estate
£1.2m estate
Married couple, £600,000 home to children
£80,000
estimated inheritance tax
- ✓ Two nil-rate bands: £650,000
- ✓ Two residence bands: £350,000
- ✓ Taxable: £200,000 at 40%
- ✓ Effective rate: 6.7%
£600,000 estate
Single, £300,000 home to children
£40,000
estimated inheritance tax
- ✓ Nil-rate band: £325,000
- ✓ Residence band: £175,000
- ✓ Taxable: £100,000 at 40%
- ✓ Effective rate: 6.7%
£900,000 estate
Married couple, £450,000 home to children
£0
no inheritance tax
- ✓ Threshold available: £1 million
- ✓ Whole estate is covered
- ✓ Claim the transfer in time
- ✓ Bands frozen to 2031
£1m estate
Single, £400,000 home to children
£200,000
estimated inheritance tax
- ✓ Threshold: £500,000
- ✓ Taxable: £500,000 at 40%
- ✓ Effective rate: 20%
- ✓ Heirs share £800,000
£2.2m estate
Single, £700,000 home to children
£720,000
estimated inheritance tax
- ✓ Residence band cut to £75,000
- ✓ £100,000 lost to the £2m taper
- ✓ Taxable: £1.8m at 40%
- ✓ Effective rate: 32.7%
How is the £1 million couple threshold made up?
When everything passes to the surviving spouse first, both sets of bands can be used on the second death.
%
Two nil-rate bands: £650,000
%
Two residence bands: £350,000
The residence nil-rate band only applies to a home, or a share of one, that goes to direct descendants: children, stepchildren, adopted or foster children and their children. Nieces, nephews and siblings do not count. It is capped at the value of the home and falls by £1 for every £2 the estate is worth over £2 million, so it is gone completely for a single estate of £2.35 million.
What are the UK estate tax rules for 2026/27?
Thresholds, gift exemptions, the 7-year taper and deadlines, all taken from GOV.UK.
| Allowance | 2026/27 rule |
|---|---|
| Nil-rate band | £325,000, frozen to 2031 |
| Residence band | £175,000, home to descendants |
| Residence band taper | £1 lost per £2 over £2m |
| Spouse or civil partner | Exempt, unused bands pass on |
| Charity | Exempt; 36% rate if 10%+ to charity |
| Gift | Tax-free limit |
|---|---|
| Annual exemption | £3,000, carry 1 year |
| Small gifts | £250 per person |
| Wedding: child | £5,000 |
| Wedding: grandchild | £2,500 |
| Wedding: anyone else | £1,000 |
| Gifts from surplus income | No limit if regular |
| Years before death | Tax on gifts over £325k |
|---|---|
| Under 3 | 40% |
| 3 to 4 | 32% |
| 4 to 5 | 24% |
| 5 to 6 | 16% |
| 6 to 7 | 8% |
| 7 or more | 0% |
| Step | Deadline |
|---|---|
| Pay inheritance tax | End of 6th month after death |
| Get IHT reference | 3 weeks before paying |
| Send full account (IHT400) | Within 12 months |
| Instalments on property | 10 yearly payments |
Tax on gifts by years survived
Applies only to the part of gifts above the £325,000 nil-rate band when the giver dies within seven years.
- Under 3 years 40%
- 3 to 4 years 32%
- 4 to 5 years 24%
- 5 to 6 years 16%
- 6 to 7 years 8%
How is inheritance tax worked out on an estate?
- Value everything. Property, savings, investments, belongings and, from April 2027, most unused pensions, minus debts and funeral costs.
- Take off exempt gifts. Anything left to a spouse, civil partner or charity is tax-free.
- Apply reliefs. Business and agricultural relief can cut the value of qualifying assets.
- Take off the tax-free bands. The £325,000 nil-rate band, reduced by gifts in the last seven years, plus any residence band.
- Tax the rest. 40%, or 36% if at least 10% of the net estate goes to charity.
Worked example
£1m estate, single, £400,000 home to children
£200,000
inheritance tax on the estate
- ✓ Nil-rate band: £325,000
- ✓ Residence band: £175,000
- ✓ Taxable: £500,000
- ✓ 40% of £500,000: £200,000
How is UK estate tax different from US estate tax?
People moving between the two countries often use the term estate tax for both, but the rules are very different.
UK inheritance tax
Charged on the estate of someone who has died
£325,000
tax-free nil-rate band per person
- ✓ Extra £175,000 for a home to descendants
- ✓ 40% above the threshold
- ✓ Bands frozen to 5 April 2031
- ✓ Worldwide estate taxed for long-term UK residents
US federal estate tax
Charged on transferring property at death
$15m
basic exclusion amount for 2026 (IRS)
- ✓ $19,000 yearly gift exclusion for 2026
- ✓ Spouse can use unused exclusion
- ✓ Needs an estate tax return on time
- ✓ Separate from UK inheritance tax
Since 6 April 2025, the UK decides whether someone’s worldwide estate is in scope by long-term residence, not domicile. A person is a long-term UK resident if they were UK resident in at least 10 of the previous 20 tax years, and the rule can follow them for up to 10 years after they leave. People who are not long-term residents can still pay UK inheritance tax on UK assets such as property.
What has changed for estate tax in 2026 and 2027?
Thresholds frozen to 2031
The £325,000 nil-rate band, the £175,000 residence band and the £2 million taper point stay fixed until 5 April 2031. GOV.UK says they will rise with inflation from 6 April 2031.
Business and farm relief cap
From 6 April 2026, 100% relief applies to the first £2.5 million of qualifying business and agricultural property and 50% above that. Unused allowance passes to a spouse, and AIM shares get 50% relief.
Pensions from April 2027
For deaths on or after 6 April 2027, most unused pension funds count as part of the estate. Executors, not the pension scheme, will report and pay the tax.
Which gifts and assets are free of estate tax?
Gifts to a spouse or civil partner
Gifts in life or on death to a spouse or civil partner who lives in the UK permanently are exempt, with no upper limit.
Gifts to charity
Anything left to a UK charity or community amateur sports club is exempt. If at least 10% of the net estate goes to charity, the rest is taxed at 36% instead of 40%.
Yearly gift allowances
You can give £3,000 a year in total, carrying one unused year forward, plus £250 each to as many people as you like who have not had another allowance from you.
Wedding and civil partnership gifts
Up to £5,000 to a child, £2,500 to a grandchild or great-grandchild and £1,000 to anyone else.
Regular gifts from income
Regular gifts paid out of surplus income, such as paying into a child’s savings, are exempt if you can still afford your normal lifestyle. Keep records so the executor can prove it.
What mistakes push an estate tax bill up?
Thinking 40% applies to the whole estate
Only the part above the threshold is taxed. A £600,000 estate with a £300,000 home to children pays tax on £100,000, not on £600,000.
Giving the house away but still living in it
If you keep living in a home you gave away without paying a full market rent, HMRC treats it as a gift with reservation and it stays in your estate.
Missing the transfer claim
The unused bands of a spouse or civil partner who died first have to be claimed within two years of the second death.
Leaving the home to the wrong people
The residence band only works for direct descendants. A home left to a niece, nephew or sibling does not qualify.
Not knowing if an IHT400 is needed
Small and simple estates can be excepted estates, for example those under the threshold or under £3 million passing to a spouse or charity. Otherwise the executor must send a full account, usually on form IHT400.
Frequently asked questions
Is there an estate tax in the UK?
Not under that name. The UK charges inheritance tax, which works like an estate tax: it is worked out on everything the person owned when they died and paid out of the estate by the executors before anything is shared out. The standard rate is 40% on the value above the tax-free threshold.
How much is the tax-free threshold in 2026/27?
Each person has a nil-rate band of £325,000. If a home goes to children or grandchildren, a residence nil-rate band of up to £175,000 is added, giving £500,000. GOV.UK confirms both are frozen until 5 April 2031.
How much can a married couple leave before estate tax is due?
Up to £1 million. Anything left to a spouse or civil partner is exempt, and the unused nil-rate band and residence nil-rate band pass to the survivor. The claim for the transferred band must be made within two years of the second death.
Who pays inheritance tax, the estate or the beneficiaries?
Usually the estate. The executor or administrator pays it from the estate’s money before the beneficiaries receive their share. Beneficiaries can become liable for tax on gifts they received in the seven years before the death.
When does inheritance tax have to be paid?
By the end of the sixth month after the death. For a death in January, the deadline is 31 July. HMRC charges interest after that, and tax on property and some business assets can be paid in ten yearly instalments.
How does the 7-year rule work?
Gifts to people are free of inheritance tax if the giver lives for seven years afterwards. If they die sooner and the gifts total more than £325,000, the tax on the excess is tapered: 40% within three years, then 32%, 24%, 16% and 8%.
Will pensions be included in the estate?
For deaths on or after 6 April 2027, most unused pension funds and pension death benefits will count as part of the estate. Death-in-service benefits and dependants’ scheme pensions are left out, and pensions passing to a spouse or civil partner stay exempt.
Do non-UK residents pay UK estate tax?
Since 6 April 2025, whether worldwide assets are taxed depends on long-term UK residence, meaning UK residence in at least 10 of the previous 20 tax years. People outside that test can still pay inheritance tax on assets located in the UK, such as UK property.
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About this page
Written by Swapan Jr, content writer at Merin Tax Return.
Reviewed by Shamayun Chowdhury, Senior Accountant.
Last updated 7 November 2026. Figures cover the 2026/27 tax year and were checked against GOV.UK. This page gives general information, not personal tax advice.
Sources
- GOV.UK: Inheritance Tax
- GOV.UK: Inheritance Tax thresholds (frozen to 2031)
- GOV.UK: Residence nil rate band
- GOV.UK: Transferring the unused threshold
- GOV.UK: Gifts and the 7-year rule
- GOV.UK: Reliefs threshold rises to £2.5 million
- GOV.UK: Unused pension funds and death benefits
- GOV.UK: Paying inheritance tax on an estate
- GOV.UK: Check the type of estate
- HMRC manual IHTM47020: long-term UK residence
- IRS: What’s new, estate and gift tax