Inheritance Tax Calculator

Inheritance Tax (IHT) is complicated and difficult to navigate without expert advice. In this guide we will try to make things as clear as possible for you.

Inheritance Tax Calculator The Basics

Estimate the value of your estate and how much inheritance tax may be due when you die. Updated for the 2020-21 tax year. now frozen until 2026.

Inheritance tax paid on what you leave behind to your heirs, and they could pay as much as 40% tax on what they inherit. Also, check out Inheritance Tax Thresholds

HMRC

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    More About Inheritance Tax (IHT)

    The good news is that there are lots of ways to cut down your bill, which we’ve explained in full in our guides to inheritance tax. But this calculator can help you estimate what potential inheritance tax bill your heirs might potentially have to pay. Enter in your assets and any debts, and we’ll show you how much your estate is worth – and an estimate of how much could be subject to inheritance tax. The calculator has been updated with the inheritance tax allowances for the 2020-21 tax year. (IHT) is charged at 40 percent on the value of an estate that falls above a certain threshold if a person has passed away. In the Budget, the Chancellor Rishi Sunak announced Inheritance Tax thresholds would remain at current rates until 2026, over the next few years many estates that are not currently liable for Inheritance Tax (IHT) will fall into a liability. If you are currently close to the limits you may wish to look at creating a Living Trust.

    Inheritance Tax Calculator For Estates Below £2,000,000

    Inheritance Tax Calculator Up To £2m

    1. Gross And Net Estate Value

    £.00
    Include the value of all your property, valuables, life insurance cover & your investments (not your pension)
    £.00
    Add together all the Estate debts, for example, mortgages, loans, credit card balances, funeral costs, probate fees, reasonable expenses and even utility bills.

    2. Net Estate Value (Click On This Panel To Update)

    3. The Deceased Marital Status

    What is the Marital Status of The Deceased?

    4. Property

    5. Is There A Property Being Passed To Lineal Dependants Such as Children or Grand Children? *
    This section is about claiming what is called Residence Nil Rate Band (RNRB)

    This is the total gross (RNRB)

    5. Estate Gifts

    Were There Any Gifts That Are Not Exempt Made In The Last 7 Years? *
    About Exempt Gifts 1. Gifts between spouses are exempt. 2. Total gifts of up to £3,000 per year are exempt 3. Wedding Gift exemption up to £1,000 for a child, £2,500 for a grand child and £5,000 for a great Grandchild. 4. Payments to help with another person’s living costs, such as an elderly relative or a child under 18 are exempt 5. Gifts to charities and political parties are exempt. 6. A person can give £250 gifts to any person once per year.
    £.00
    Include the value of all your property, valuables, life insurance cover & your investments that were gifted to someone in the last 7 years.

    6. The Total Taxable Estate

    40% is the standard rate of Inheritance Tax If the calculation is lower than zero there is no Inheritance Tax to pay

    7. Your Estate 40% Tax Liability

    Can you afford to pay the inheritance tax? If not call us now on 0808 188 9008 or discuss dealing with your probate by filling in the short form below.
    Would You Like To Discuss Dealing Probate Free For 30 Minutes? *
    Would you like a Probate Brochure?
    Approximate Time You Would Like a Call?

    4. There Is No Inheritance Tax To Pay

    Would You Like To Discuss Dealing Probate Free For 30 Minutes? *
    Would you like a Probate Brochure?
    Approximate Time You Would Like a Call?

    4. About The First Deceased of a Marriage or Civil Partnership

    What Tax Year Did The First Spouse Pass Away? (Scroll down after answering) *

    Note: Inhertiance Tax Nil Rate Band (NRB) From 1st Spouse

    This is the maximum Nil Rate Band (NRB) that can be claimed in your estate, but you will need to answer some further questions

    5. About Property

    Is There A Property Involved In The Estate That Is Being Passed To A Linel Desendant Such As A Child or Grandchild? *
    This section is about claiming what is called Residence Nil Rate Band (RNRB)
    If The First Spouse Died Before or After These Dates Please Select The Correct Dates *
    This section is about claiming what is called Residence Nil Rate Band (RNRB)

    This is the total gross (RNRB)

    The Gross Total Taxable Estate

    Inheritance Tax You Will Pay

    6. Estate Gifts

    Were There Any Gifts That Are Not Exempt Made In The Last 7 Years? *
    1. Gifts between spouses are exempt. 2. Total gifts of up to £3,000 per year are exempt 3. Wedding Gift exemption up to £1,000 for a child, £2,500 for a grand child and £5,000 for a great Grandchild. 4. Payments to help with another person’s living costs, such as an elderly relative or a child under 18 are exempt 5. Gifts to charities and political parties are exempt. 6. A person can give £250 gifts to any person once per year.
    £.00
    Include the value of all your property, valuables, life insurance cover & your investments that were gifted to someone in the last 7 years.

    Your Estate 40% Tax Liability

    Can you afford to pay the inheritance tax? If not call us now on 0808 188 9008 or discuss dealing with your probate by filling in the short form below.
    Would you like to discuss dealing with your probate for free for 30 minites?
    Approximate Time you would like call *

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    Brochure request

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    About The Calculator

    The calculator is for general guidance only and cannot be relied upon as fact It does not allow for every variable. If you want an accurate account of your Estate liabilities please contact us for a free discussion.

    What is the inheritance tax threshold for married couples (or civil partner couples)?

    The inheritance tax threshold for married couples (or civil partnerships) in the 2020/21 tax year is £325,000. However, this can be increased to £650,000 if one partner dies and leaves everything to the surviving partner. This is because spouses and civil partners inherit from each other tax-free, and they also inherit their partner’s unused inheritance tax allowance.

    Does every estate have to pay inheritance tax?

    The inheritance tax allowance doesn’t apply between spouses and civil partners who live in the UK. This means that, if the entire estate you’re dealing with has been left to the person’s spouse or civil partner, no inheritance tax will be owed – even if the estate is over £325,000.

    Does everyone have the same inheritance tax threshold?

    The short answer: no. It’s actually possible for many people to double their inheritance tax allowance to £650,000 and here’s how.

    If someone who is married (or in a civil partnership) leaves their entire estate to their spouse, their unused inheritance tax allowance of £325,000 will also pass to their partner. This effectively doubles the surviving spouse’s inheritance tax threshold to £650,000. The same benefit also applies to people in a civil partnership.

    This means that, if someone’s spouse or civil partner dies and leaves them their entire estate, the surviving partner’s inheritance tax allowance will effectively be £650,000.

    Who pays inheritance tax?

    If there is a will, the executor is legally responsible for paying the inheritance tax bill from the estate. If there isn’t a will, this is usually handled by the administrator who in turn is also legally responsible.

    Figuring out exactly how much inheritance tax is due can be difficult, so many people choose to use a professional probate specialist when dealing with their loved one’s estate.
    Once the amount of inheritance tax owed has been calculated, this can either be paid from funds within the estate, money from the sale of assets, or through the Direct Payment Scheme (DPS). This is where inheritance tax is paid directly from the bank or building society of the person who died.

    How to avoid paying inheritance tax

    You can avoid paying inheritance tax in a number of ways, including:
    Leaving everything to a spouse or civil partner: married couples and civil partners can leave assets to one another without incurring inheritance tax.

    Leaving property to children: homeowners get an extra £175,000 added to their inheritance tax allowance if they leave property to their children, step-children, or grandchildren, taking their total inheritance tax allowance to £500,000.

    Leaving 10% of the estate to charity: if 10% of an estate is left to charity, the inheritance tax rate can be reduced from 40% to 36%, potentially cutting the amount of inheritance tax due by thousands.

    If you’re dealing with someone’s estate and want to change their will to make it more tax-efficient, you could get a legal document called a deed of variation.
    For more information on making your own will tax-efficient, please take a look at our free guide on how to avoid inheritance tax.

    You can create a living trust, this will allow you to remove £325,000 from the estate every 7 years. A couple with a shared property or assets could also create a living trust each raising the amount to £650,00 however if you within the 7 years though it will be included in the estate as a gift.  If you are young enough it is worthwhile considering a living trust especially in light of the freezing of the IHT allowances until 2026 as the property will still be going up in value. 

    When do you need to pay inheritance tax?

    Inheritance tax ideally needs to be paid by the end of the sixth month after your loved one’s death. After this point, HMRC will start charging interest. They may also charge late payment penalties, which can be as high as £3,000 if the payment is more than 12 months late. It’s therefore important to apply for probate and gain access to the estate as quickly as possible.

    How to fill out the required forms

    The main form is called an IHT400, this form is a government form that needs to be completed in England, Wales, and Scotland if the estate is liable for inheritance tax. This is a long, complex document with multiple sections for different types of assets, allowing you and HMRC to work out how much inheritance tax is due. The IHT400 form leads to a possible further 22 forms and which all need cross calculations.

    Unless you’re very familiar with tax forms and financial paperwork, IHT400 can be an extremely stressful and time-consuming form to fill out. For this reason, many people choose to use a professional probate specialist instead. contact us now on the details below or start your probate now online. If you would like an instant quote for probate try Probate Full Administration or Grant Only or get an Instant Quote using the buttons below.

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    Reducing or managing an Inheritance Tax bill

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