Inheritance Tax Exemption Calculator — UK IHT Planning & Estimates

Inheritance Tax Exemption Calculator

Calculate inheritance tax liability, exemptions, and allowances for UK estates. Get accurate IHT estimates and tax planning strategies based on current thresholds.

Step 1: Estate Details

£500,000
£350,000
£25,000
£5,000

Estate Valuation

Include all assets: property, savings, investments, vehicles, and personal possessions. Deduct debts, mortgages, and funeral expenses from the total estate value.

Step 2: Exemptions & Allowances

£0
£175,000
10%

UK Inheritance Tax Thresholds

Standard nil-rate band: £325,000. Residence nil-rate band: £175,000 (for passing home to direct descendants). Married couples can transfer unused allowances.

Inheritance Tax Calculation Results

Summary
Exemptions
Tax Breakdown

Total Inheritance Tax Due

£42,500
Effective Tax Rate: 8.5%
Taxable Estate
£500,000
Total Exemptions
£325,000
Tax Rate
40%
Planning Status
Moderate

Inheritance Tax Exemptions & Allowances

Standard Nil-Rate Band
£325,000
Available to all estates
Residence Nil-Rate
£175,000
For passing home to descendants
Spousal Exemption
£0
Assets passed to spouse
Charitable Reduction
36%
Reduced rate for 10%+ to charity

Exemption Planning

Married couples can transfer unused nil-rate bands. Gifts made more than 7 years before death are usually exempt. Business and agricultural property may qualify for 50-100% relief.

Tax Liability Breakdown

Tax Calculation Formula

IHT = (Taxable Estate – Allowances) × 40%

Taxable estate = Total assets – (debts + funeral expenses). Standard rate is 40% above thresholds. Reduced 36% rate applies if 10%+ of estate left to charity.

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