Value of main residence included in estate
Business or agricultural assets qualifying for APR/BPR.
AIM and similar shares receive 50% relief in 2026/27.
Children, grandchildren, etc. — qualifies for RNRB
Unused nil-rate band from a deceased spouse
Unused residence nil-rate band from a deceased spouse
Reg. 07380272 · England & Wales · Est. 2010
Planning your estate?
Inheritance tax planning can save your family thousands. Gladstone & Co. specialise in estate planning, trusts, and IHT mitigation.
Net Estate
£500,000.00
Total Threshold
£500,000.00
Rate Applied
40.0%
Effective Rate
0.0%
Estate Breakdown
Everything you need to know about inheritance tax in the UK
What is the nil-rate band?
The nil-rate band (NRB) is the IHT-free threshold, currently £325,000. Estates valued below this pay no IHT.
What is the residence nil-rate band (RNRB)?
An additional £175,000 allowance when your main home is left to direct descendants (children, grandchildren). It tapers by £1 for every £2 the estate exceeds £2 million.
Can I transfer unused allowances from my spouse?
Yes. If your spouse died and didn't use their full NRB or RNRB, the unused percentage can be transferred to your estate, potentially doubling the threshold to £1 million.
How does the charity rate work?
If you leave at least 10% of your net estate (after deducting the nil-rate band) to charity, the IHT rate reduces from 40% to 36%.
HMRC-Aligned: This calculator uses official 2025/26 IHT thresholds and rates. Actual liability may vary depending on lifetime gifts, trusts, business property relief, and agricultural property relief. Consult a professional adviser for complex estates.
How is IHT calculated?
Inheritance tax is charged at 40% (or 36% if the charity rate applies) on the value of your estate that exceeds the available thresholds. The estate includes property, savings, investments, and certain gifts made in the 7 years before death. Amounts left to a spouse or charity are deducted before tax is calculated.
Available thresholds
With a full transfer of both bands from a deceased spouse, the combined threshold can reach up to £1,000,000 before any IHT is due.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms