IHT Due
£40,000.00
Estate After Tax
£560,000.00
Taxable Amount
£100,000.00
Threshold Used
£
Rates & sources2025/26
IHT on estate value above the nil-rate band. Main residence RNRB adds allowance when leaving home to direct descendants.
Source: HMRC — Inheritance Tax — figures refreshed at the start of each tax year.
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When to use this calculator
- Before accepting a pay change, bonus, pension contribution, or salary-sacrifice option.
- When you want to compare employed, self-employed, or dividend-based income scenarios.
- When you need a simple take-home estimate before running payroll or filing returns.
- When you are approaching the £100,000 income level and want to understand the personal allowance taper effect.
- When you are planning a salary sacrifice arrangement and need to see the net pay impact before agreeing terms.
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.
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
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Estate After Tax
Review this figure alongside your gross income so you can understand the true cost of deductions and plan around any thresholds before the tax year closes. If the figure looks higher than expected, check whether any pension or gift-aid contributions could reduce your taxable income.
Taxable Amount
Review this figure alongside your gross income so you can understand the true cost of deductions and plan around any thresholds before the tax year closes. If the figure looks higher than expected, check whether any pension or gift-aid contributions could reduce your taxable income.
Threshold Used
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
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 the National Insurance threshold changes that apply mid-year when rates or bands are adjusted in a Budget.
- !Assuming a salary sacrifice benefit reduces take-home pay by the full gross amount, rather than only the after-tax cost.
What to do next
- Check the same scenario with related pay or deduction calculators to see the full picture.
- Keep a copy of the assumptions you used so you can compare next tax year or pay period accurately.
- Read the related guides below if you are choosing between multiple income or deduction options.
- If you are self-employed, run the self-employment tax calculator alongside this result to compare the net position against employed income.
- Check whether increasing your pension contribution by even one or two percent changes the take-home significantly — use the pension calculator next.
Go deeper — 1 guide reference this calculator
Frequently asked
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