Inheritance Tax Calculator
Calculate inheritance tax liability for estates in the UK. Determine tax due based on estate value, tax-free allowances, and your relationship to the deceased.
Step 1: Estate Details
Inheritance Tax Formula
Taxable Estate = Estate Value – Tax-Free Allowance
Inheritance Tax = Taxable Estate × Tax Rate (usually 40%)
Some relationships qualify for reduced rates or exemptions.
Step 2: Tax Details & Options
Current UK Inheritance Tax Rates
Standard tax rate: 40%
Reduced rate for gifts to charity: 36%
Tax-free threshold: £325,000 per person
Additional residence allowance: Up to £175,000
Spouse exemption: Unlimited transfers between spouses
Inheritance Tax Results
Total Inheritance Tax Due
Inheritance Tax Comparison
| Estate Value | Tax-Free Allowance | Tax Due | Net Inheritance |
|---|
Inheritance Tax Formula & Rules
Inheritance Tax = (Estate Value – Allowances) × Tax Rate
Where:
• Estate Value = Total value of assets and property
• Allowances = Tax-free threshold + additional allowances
• Tax Rate = Usually 40%, but can be reduced in some cases
Key UK Inheritance Tax Rules:
• £325,000 tax-free threshold per person
• Unlimited transfers between spouses/civil partners
• Additional £175,000 residence nil-rate band
• Reduced 36% rate for charitable donations over 10%
• Tapered relief for gifts given 7+ years before death
Example Calculation
Example: £750,000 Estate
Estate Value: £750,000
Tax-Free Allowance: £325,000
Residence Nil-Rate Band: £175,000
Total Allowance: £500,000
Calculation:
Taxable Estate = £750,000 – £500,000 = £250,000
Inheritance Tax = £250,000 × 40% = £100,000
Result:
Tax Due: £100,000
Net Inheritance: £650,000
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