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HMRC IHT Rules • 2026/27

UK Inheritance Tax Calculator 2026/27

Estimate the Inheritance Tax position on an estate using the current Nil Rate Band, Residence Nil Rate Band, RNRB taper, recent gifts, debts and selected 2026 relief assumptions.

Estate IHT Estimator

Property, investments, cash and other assets.
Enter the actual unused percentage available.
Enter the actual unused RNRB percentage available.
Simplified input only; exact lifetime-gift calculations require dates and transfer types.
Exact 36% reduced-rate testing requires the statutory baseline calculation.
Simplified 2026/27 relief estimate. The £2.5m 100% relief allowance has detailed allocation rules.

2026/27 IHT Thresholds

Allowance / Rate2026/27
Nil Rate Band£325,000
Residence Nil Rate BandUp to £175,000
RNRB taper starts£2,000,000 net estate
Standard death rate40%
Reduced charity rate36% where statutory test is met
100% AR/BR allowance£2.5 million

The thresholds are fixed at these levels for 2026/27. Qualifying estates can potentially use up to £500,000 of combined NRB/RNRB per person and up to £1 million for a qualifying surviving spouse/civil partner estate when unused allowances are transferable.

Residence Nil Rate Band

Up to £175,000 can be available where a qualifying residence is closely inherited by direct descendants. The RNRB tapers by £1 for every £2 above the £2 million net-estate threshold.

Gifts & 7-Year Rule

Gifts can affect the IHT position during the 7 years before death. Taper relief can reduce the tax rate on certain gifts made 3 to 7 years before death; it does not simply make the gift itself tax-free.

2026 Business & Farm Relief

From 6 April 2026, 100% Agricultural/Business Relief is subject to a combined £2.5 million allowance for an individual, with qualifying value above that generally receiving 50% relief.

UK Long-Term Residence and IHT on Overseas Assets

From 6 April 2025, the IHT rules for overseas assets use a residence-based long-term UK resident test rather than the former domicile/deemed-domicile framework.

A person is generally long-term UK resident when they have been UK tax resident for at least 10 of the previous 20 tax years. However, leaving the UK does not necessarily take worldwide assets immediately outside IHT. A long-term UK resident can remain within the worldwide-asset regime for between 3 and 10 tax years after leaving, depending on their residence history.

Important Limitations of This Calculator

  • It does not calculate trusts or every type of lifetime transfer.
  • It does not fully calculate the statutory charitable 10% baseline amount.
  • It does not model every spouse/civil-partner exemption or transferable-allowance scenario.
  • It does not independently value Business Relief or Agricultural Relief qualifying assets.
  • It does not model downsizing provisions for the RNRB.
  • It is an illustrative estimator and should not be treated as an IHT400 calculation or professional tax advice.

Frequently Asked Questions (6)

For 2026/27, the standard Nil Rate Band is £325,000 and the Residence Nil Rate Band is up to £175,000. The RNRB applies where a qualifying residence is inherited by direct descendants and the relevant conditions are met. The RNRB starts to taper when the net estate exceeds £2 million. Unused NRB and RNRB can potentially be transferred from a predeceased spouse or civil partner.

The maximum RNRB is reduced by £1 for every £2 by which the net value of the estate exceeds £2 million. For example, an estate with a net value of £2.1 million has a £50,000 RNRB reduction. The taper is based on the net estate, not simply the gross value of the assets.

No. £1 million is a possible combined allowance where a qualifying estate can use the £325,000 NRB and £175,000 RNRB for both spouses or civil partners, including transferred unused percentages from the first spouse where the conditions are met. Simply selecting “married” does not automatically create £1 million of allowance in every estate.

A person is generally a long-term UK resident for IHT purposes if they have been UK tax resident for at least 10 of the 20 tax years immediately before the relevant tax year. A person who leaves the UK after becoming long-term UK resident can remain within the worldwide-asset IHT rules for a period of between 3 and 10 tax years, depending on their previous UK residence history.

A gift to an individual can normally fall outside IHT if the donor survives 7 years after making it, subject to the rules on gifts with reservation and other exceptions. Gifts made within 7 years can use some of the available Nil Rate Band, and taper relief can reduce the rate of tax on certain gifts made between 3 and 7 years before death.

Yes. Qualifying Business Relief and Agricultural Relief can reduce the taxable value of qualifying assets. From 6 April 2026, 100% relief on qualifying agricultural and business property is subject to a combined £2.5 million allowance for an individual, with qualifying value above that generally receiving 50% relief. A qualifying charitable-giving condition can also reduce the IHT rate on the relevant estate component from 40% to 36%.

Official HMRC / GOV.UK Sources

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