Inheritance tax calculator
Most estates get £325,000 with no inheritance tax. Anything above that is taxed at 40% here. If a qualifying home is going to children or grandchildren, you can add the extra residence band. Gifts in the seven years before death, reliefs, and the 36% charity rate are not in this.
Result
Tax-free amount used
£325,000.00
Taxable estate
£275,000.00
Inheritance tax
£110,000.00
The extra home band shrinks once the estate passes £2 million. The 36% rate for gifts to charity is not in this.
Here’s one
A £600,000 estate, no residence band
A £600,000 estate with no home band: £325,000 is free, so £275,000 is taxed. At 40% that’s £110,000. Turn on the home band, when it really applies, and another £175,000 can come off before that band starts to shrink.
How it works
40% of what’s left after £325,000. If you say a qualifying home is going to direct descendants, we also take off up to £175,000. That extra band falls by £1 for every £2 the estate is over £2 million.
Where this comes from
The rate here is 40% above the tax-free band. GOV.UK has kept that band at £325,000 and the home band at £175,000 for 2026 to 2027. Gifts in the seven years before death, reliefs, and the 36% charity rate are not in this.
Good for
A plain 40% look. Anything with gifts, reliefs, or charity needs a fuller working.
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Don’t file a return from this