What is the UK Inheritance Tax threshold?

The nil-rate band is £325,000 (frozen until 2028). A further £175,000 residence nil-rate band applies if a home is left to direct descendants. Spouses/civil partners can inherit unused allowances, giving a combined potential threshold of £1,000,000.

What rate is UK Inheritance Tax charged at?

IHT is charged at 40% on the estate value above the nil-rate bands. A reduced rate of 36% applies if at least 10% of the net estate is left to charity.

UK Inheritance Tax Calculator

Formula Definitions

The UK Inheritance Tax Calculator works by applying a well-defined formula to the values you enter. Understanding the formula behind the calculation helps you interpret the result and check that your inputs are correct. Below we break down the key components that drive the UK Inheritance Tax.

The core formula used by this calculator is:

Result = f(principal, rate, time, jurisdiction)

Each variable in the formula has a specific meaning:

principal — Initial amount, income, or base value entered into the UK Inheritance Tax.
rate — Interest rate, tax rate, return rate, or growth rate applied per period.
time — Number of periods (years, months, or days) over which the calculation runs.
jurisdiction — Country, tax year, filing status, or regional rules that adjust the calculation.
Result — Computed amount: total, liability, return, repayment, or present/future value.

Note: Financial results are estimates and depend on the accuracy of the inputs and applicable rules.

How to Use This Calculator

Enter your financial figures. Enter income, principal, interest rate, tax year, or relevant financial parameters into the UK Inheritance Tax Calculator.
Adjust regional settings. Select your country, tax jurisdiction, filing status, or applicable tax year and rates.
Calculate your result. Press Calculate to compute the financial result, tax liability, return, or repayment amount.
Review the breakdown. Review the detailed breakdown including totals, effective rates, interest components, and applicable tax implications.

Glossary and Definitions

Principal: The initial amount of money on which interest, returns, or tax liabilities are calculated.
Interest rate: The percentage charged or earned per period on the principal, expressed as an annual rate unless stated otherwise.
Compounding: The process by which interest is added to the principal so that subsequent interest is earned on the combined amount.
Present value: The current worth of a future sum, discounted at a given rate to account for the time value of money.
Inheritance tax calculator: A key concept referenced by the UK Inheritance Tax: Estimate UK Inheritance Tax (IHT) liability on an estate. Includes nil-rate band, residence nil-rate band, spouse/civil partner exemption, charity relief, and taper relief for gifts.
IHT UK: A key concept referenced by the UK Inheritance Tax: Estimate UK Inheritance Tax (IHT) liability on an estate. Includes nil-rate band, residence nil-rate band, spouse/civil partner exemption, charity relief, and taper relief for gifts.
Estate tax UK: A key concept referenced by the UK Inheritance Tax: Estimate UK Inheritance Tax (IHT) liability on an estate. Includes nil-rate band, residence nil-rate band, spouse/civil partner exemption, charity relief, and taper relief for gifts.
Nil-rate band: A key concept referenced by the UK Inheritance Tax: Estimate UK Inheritance Tax (IHT) liability on an estate. Includes nil-rate band, residence nil-rate band, spouse/civil partner exemption, charity relief, and taper relief for gifts.

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