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Rates & sources2026/27
IHT on estate value above the nil-rate band. Main residence RNRB adds allowance when leaving home to direct descendants.
| Band / figure | Rate |
|---|---|
| Nil-rate band | £325,000 |
| Residence nil-rate band | £175,000 |
| Rate on excess | 40% |
| Reduced rate (charity ≥10%) | 36% |
Source: HMRC — Inheritance Tax — source checked for 2026/27.
When to use this calculator
- Before accepting a pay change, bonus, pension contribution or salary-sacrifice option.
- When you want a simple take-home estimate before payroll or filing.
- When you are approaching the £100,000 income level and want to see the personal allowance taper.
- When you need to convert between hourly, monthly and annual pay.
Worked example: £750,000 estate, home left to children
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
| Input | Value |
|---|---|
| Estate value | £750,000 |
| Nil-Rate Band | £325,000 |
| Residence Nil-Rate Band (home to descendants) | £175,000 |
| Total exempt | £500,000 |
| Taxable estate | £250,000 |
| IHT at 40% | £100,000 |
| Estate after tax | £650,000 |
A married couple with the same estate jointly would pay zero — both NRBs and RNRBs transfer between spouses, raising the combined threshold to £1m.
How to read your results
IHT Due
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Estate After Tax
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Taxable Amount
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Threshold Used
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Method & assumptionsAuthoritative sources
This calculator estimates the potential Inheritance Tax liability on an estate based on the rules that apply in England and Wales. It applies the standard nil-rate band and, where applicable, the residence nil-rate band for estates passing a main residence to direct descendants. The calculator assumes all assets above the available thresholds are charged to IHT at the standard rate of 40%, or at the reduced rate of 36% if at least 10% of the net estate is left to qualifying charities.
The estimate does not account for the complex tapering rules on gifts made within seven years of death, Business Property Relief, Agricultural Property Relief, assets held in qualifying trusts, or the interaction with lifetime gifts. Estates involving overseas assets, non-domiciled individuals, or complex trust structures require specialist advice. IHT planning is highly personal, and this tool is intended only as a starting point for understanding your potential liability.
Common mistakes
- !Entering gross income when you really want take-home pay, or vice versa.
- !Ignoring pension contributions, deductions or local tax rules that change the result.
- !Comparing monthly and annual figures without standardising them first.
- !Overlooking National Insurance or student-loan plan differences that apply to you.
What to do next
- Check the same scenario with related pay or deduction calculators.
- Keep a copy of the assumptions so you can compare the next tax year or pay period.
- If you are self-employed, compare this result with the self-employment tax calculator.
- Check whether a small pension contribution change moves take-home pay more than you expect.
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