Inheritance Tax Calculator
Calculate potential inheritance tax liability with our professional calculator. Account for property value, other assets, available reliefs, and nil-rate bands. Updated with the latest tax rates and thresholds for 2024/25.
Calculate Inheritance Tax
Your Inheritance Tax Calculation
Total IHT Due
£0
Effective Tax Rate
0%
Calculation Breakdown
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Important Notes
- Nil-rate band: £325,000 (2024/25)
- Residence nil-rate band: £175,000 (2024/25)
- Standard IHT rate: 40%
- Reduced rate for charity bequests: 36%
- Taper relief applies to gifts made 3-7 years before death
Frequently Asked Questions
Common questions about inheritance tax
What is the nil-rate band?
The nil-rate band is the amount up to which no inheritance tax is paid (currently £325,000). If you're married or in a civil partnership, any unused portion can be transferred to your surviving spouse, potentially doubling the threshold to £650,000.
What is the residence nil-rate band?
The residence nil-rate band is an additional allowance (currently £175,000) when passing your main residence to direct descendants (children, grandchildren). Like the standard nil-rate band, any unused portion can be transferred to a surviving spouse, potentially adding up to £350,000 to the tax-free threshold.
How are gifts taxed for inheritance tax?
Gifts made within 7 years of death may be subject to inheritance tax. Those made 3-7 years before death receive taper relief, reducing the tax rate. Annual gifts up to £3,000, small gifts up to £250 per person, and regular gifts from surplus income are exempt. Wedding gifts and gifts to charity have special allowances.
What happens if I leave money to charity?
Gifts to qualifying charities are exempt from inheritance tax. If you leave 10% or more of your net estate to charity, the inheritance tax rate on the rest of your estate is reduced from 40% to 36%. The calculation for this is complex and should be discussed with a professional advisor.
What debts can be deducted from my estate?
Most debts can be deducted, including mortgages, loans, credit card debts, and reasonable funeral expenses. However, debts used to buy assets that qualify for IHT relief (like business property) may not be fully deductible. Debts must be genuine and legally enforceable.