Frequently asked questions
What is the Inheritance Tax threshold in 2026/27?
The nil-rate band is £325,000. A residence nil-rate band of up to £175,000 may also apply when a qualifying home passes to direct descendants, subject to the home value and other conditions. If both partners’ bands are fully unused and claimable, the combined maximum can reach £1 million.
What is the residence nil-rate band?
An allowance of up to £175,000 that may apply when a qualifying home passes to direct descendants. It cannot exceed the qualifying home value and is reduced by £1 for every £2 that the estate exceeds £2 million. A full single-person band is exhausted at £2.35 million.
How does the spouse or civil-partner transfer work?
The survivor may claim the unused percentage of a late spouse or civil partner’s bands. The amount can be less than 100%, a claim is required, and the residence-band transfer still has qualifying-home and descendant conditions. This calculator’s transfer option assumes a fully unused claimable percentage.
What is the Inheritance Tax rate?
The standard rate is normally 40% on the part of the estate above available allowances. A 36% reduced rate can depend on at least 10% of a statutory baseline amount going to charity. The calculator shows only a 36% sensitivity and does not determine eligibility or deduct the gift.
Are pensions subject to Inheritance Tax?
Finance Act 2026 provides for most unused pension funds and pension death benefits to enter estates from 6 April 2027, subject to exclusions and further administration guidance. This calculator covers 2026/27 and does not model that future rule.
Does the calculator include Agricultural or Business Relief?
No. For qualifying property on deaths from 6 April 2026, the combined 100% Agricultural and Business Relief allowance is £2.5 million and qualifying value above it generally receives 50% relief. Eligibility, spouse transfers, trusts and lifetime gifts need individual review.
Does this replace professional advice?
No. This is a free, independent educational estimate. Reliefs, exemptions and lifetime gifts can change the figure significantly. Check GOV.UK and speak to a solicitor or tax adviser.