Inheritance Tax Estimator.
Nil-rate bands, the residence uplift and the £2m taper — what an estate would actually pay.
The nil-rate band is £325,000 and the residence nil-rate band up to £175,000 (home passing to direct descendants) — both doubled where a late spouse's allowances transfer, and the residence band tapers away above £2m estates. Tax above the bands is 40%, or 36% with a 10% charitable legacy. This is an estimator: reliefs, gifts within seven years, trusts and business property change everything — Everything runs in your browser — your figures never leave it. Estimates are general information, not advice: ask us about your own position.
The tax on standing still
Frozen bands, rising houses — the quiet arithmetic.
Inheritance Tax used to be someone else's problem. Then the nil-rate band froze at £325,000, London property did what London property does, and perfectly ordinary Finchley estates drifted over the line at 40%. The mechanics this estimator applies: £325,000 nil-rate band, up to £175,000 more where the home passes to children or grandchildren, both doubled where a late spouse's allowances transfer — up to £1m tax-free for a married couple with a family home, but far less the moment the estate tops £2m and the residence band tapers away.
The consoling truth: IHT is the most plannable tax on the statute book. Gifts survive seven years and leave the estate entirely; business property relief can remove a trading company at up to 100%; leaving a tenth to charity cuts the rate to 36%; pensions sit outside the estate under current rules. None of it works retrospectively — which is why the only IHT planning that fails is the kind that never started. It sits squarely in our advisory work, usually alongside the family company.
Common questions.
How much can pass free of Inheritance Tax?
£325,000 per person, plus up to £175,000 of residence band where the home passes to direct descendants. Unused allowances transfer between spouses, so a married couple with a family home can pass up to £1m tax-free. Estates over £2m lose £1 of residence band for every £2 over.
Does my business count in my estate?
It is in the estate, but Business Property Relief can take a qualifying trading business or unquoted trading company shares out of charge at up to 100% after two years of ownership. Investment businesses and large cash piles inside the company can dilute the relief — a structural question worth reviewing while there is time to fix it.
How do lifetime gifts work?
Most outright gifts are potentially exempt: survive seven years and they leave the estate entirely, with taper relief on the tax after three. Separately, £3,000 a year is exempt immediately, as are regular gifts out of surplus income — an underused exemption with no upper limit if done and documented properly.
Is this estimator enough to plan with?
No — it shows the scale of the problem, not the solution. Wills, gift timing, trusts, business relief and pension nominations interact, and the rules change at Budgets. Treat the figure here as the reason to have the conversation, not the conclusion of it.
Keep going.
Tax advisory
Estate and succession planning alongside the family company.
Open →Capital Gains Tax Calculator
Gifts of assets can trigger CGT today even when IHT-free later — check both.
Open →Savings Growth Calculator
See how quickly a quietly growing estate reaches the frozen bands.
Open →Prefer a human with the numbers?
If the estimator shows a number you don't like, good news: this is the one tax where starting early genuinely fixes it.