Inheritance tax calculator: today vs from April 2027
From 6 April 2027 most unused pension funds count towards your estate for inheritance tax. This calculator shows your estimated bill under today's rules and from April 2027, side by side.
Default example: married or civil partners, on second death
- Main home value: £800,000, left to children or grandchildren
- Mortgage or loans secured on the main home: £0
- Savings and investments: £450,000
- Other assets (property, cars, contents): £450,000
- Unused pension funds (combined): £1,200,000. Exclude death in service benefits and dependants' scheme pensions.
- Life policies not written in trust: £0
- Debts and funeral costs: £0
- Qualifying business or farm assets: £0
- Gifts in the last 7 years above exemptions: £0
- Share of estate left to charity: 0%
IHT today: £280,000
- Estate value
- £1,700,000
- Allowances used
- £1,000,000
- Taxable estate
- £700,000
- Rate
- 40%
- What heirs receive, before any income tax on inherited pensions
- £2,620,000
Includes £1,200,000 of pensions passing outside the estate
IHT from April 2027: £900,000
- Estate value
- £2,900,000
- Allowances used
- £650,000
- Taxable estate
- £2,250,000
- Rate
- 40%
- What heirs receive, before any income tax on inherited pensions
- £2,000,000
Increase: £620,000
Your estate is over 2 million, so you lose some or all of the residence nil rate band.
Uses 2026/27 allowances. Simplified: ignores taper relief on gifts, the 14 year rule, overseas assets and income tax on inherited pensions after 75. For illustration only and not advice.
See how whole of life cover could pay this
How this calculator works
For married or civil partners, this models the second death and assumes the spouse exemption applies in full on the first death and both partners' allowances transfer in full, before any residence nil rate band taper. Enter both partners' combined assets. Single and widowed people enter their own assets. Unmarried partners enter one person's assets and their share of jointly owned assets, and run the calculator separately for each partner. Widowed people choose separate transferred percentages for the nil rate band, residence nil rate band and business or agricultural relief allowance.
The gross estate includes your home, savings and investments, other assets, life policies not written in trust and qualifying business or farm assets, less the mortgage or loans secured on the main home, other debts and funeral costs. Today's calculation excludes unused pensions; from 6 April 2027 most unused pension funds are included under the Finance Act 2026. The net home value is the home value less its mortgage, with a minimum of zero.
The 2026/27 nil rate band is £325,000 per person, frozen to April 2031. Married or civil partners can use £650,000 on second death. For widowed people, only the chosen unused nil rate band transfer increases this band. Gifts in the last 7 years above exemptions reduce the available band, not below zero. Gifts exceeding the full available band can themselves be taxed on death within 7 years, usually payable by the recipient; that tax is not included here.
The maximum residence nil rate band is £175,000 per person (£350,000 for a married couple); widowed people use their separate residence nil rate band transfer. First reduce this maximum by £1 for every £2 the gross estate after debts, but before reliefs and exemptions, exceeds £2 million, not below zero. Then cap the tapered allowance at the net home value passing to children or grandchildren. Yes assumes your whole share of the home, after the mortgage, passes to children or grandchildren.
Business and agricultural relief is 100% on the first £2.5 million of qualifying assets per person (£5 million for a married couple), then 50% above that limit. Widowed people use their separate transferred business relief percentage. Do not include these assets in savings or other assets. AIM shares and other assets that only qualify for 50% relief are not covered by this field. Assumes no earlier gifts have used the £2.5m allowance and no outstanding borrowing was used to buy, maintain or improve these assets, even if it is secured elsewhere.
The charity gift is the chosen percentage of the estate after business or agricultural relief and before allowances. Assumes the charity gift does not reduce the share of the home passing to descendants. The rate is 36% when the charity gift is at least 10% of the baseline amount: the estate after reliefs less the nil rate band, without deducting the residence nil rate band. Otherwise it is 40%.
The taxable estate is the estate after reliefs, less the nil rate band, residence nil rate band and charity gift, with a minimum of zero. Inheritance tax is the taxable estate multiplied by the rate. What heirs receive is before any income tax on inherited pensions: the estate less inheritance tax and the charity gift, plus unused pensions passing outside the estate today. From April 2027, pensions are already included in the estate. Both chart bars include pensions so the comparison is like for like.