UK Inheritance Tax (IHT) & Nil Rate Band Planner
Calculate UK estate inheritance tax and estimate tapered nil rate bands.
UK Inheritance Tax (IHT) & NRB Planner
Plan estate tax liabilities and estimate your Nil Rate Band thresholds under HMRC guidelines.
Estate Assets
HMRC Nil Rate Allowances
Educational Purpose Disclaimer
This calculator is provided for informational and educational estimation purposes only. All calculations and projections are based on standard mathematical formulas and assumed inputs. The output values should not be considered professional financial, legal, tax, or medical advice. ProCalc is not a registered financial advisor or licensed practitioner. Always consult a qualified professional (such as a Chartered Accountant, certified planner, or physician) before making major decisions.
What is the UK Inheritance Tax (IHT) & Nil Rate Band Planner?
The UK Inheritance Tax (IHT) & Nil Rate Band Planner is an estate-planning tool designed to help UK families estimate the potential inheritance tax liability on their estate and plan allowances to minimize tax bills.
Inheritance Tax is a tax on the estate (property, cash, investments, and personal belongings) of someone who has passed away:
• Basic Nil Rate Band (NRB): The standard tax-free threshold is £325,000 per person. If the total estate value is below this limit, no inheritance tax is owed.
• Residence Nil Rate Band (RNRB): An additional tax-free allowance of up to £175,000 is available if you pass your main residential home directly to direct descendants (children, grandchildren, or stepchildren). This brings the potential individual tax-free threshold to £500,000.
• Spousal Exemption and Transferability: Spouses and civil partners can pass their entire estate to each other tax-free. Additionally, any unused Nil Rate Bands can be transferred to the surviving partner, creating a combined tax-free threshold of up to £1,000,000 for a married couple.
• The Tapering Trap: The Residence Nil Rate Band is tapered down by £1 for every £2 that the net estate value exceeds £2,000,000, regardless of who inherits the property.
• Tax Rate (40%): The portion of the estate that exceeds your combined tax-free thresholds is taxed at a flat rate of 40%.
This planner calculates your combined Nil Rate Bands, applies the £2M tapering rules, computes your inheritance tax liability, and shows the net estate value passed to heirs.
How Does the UK Inheritance Tax (IHT) & Nil Rate Band Planner Work?
1. Input total estate value. 2. Select if passing home to direct descendants. 3. View threshold limits, taxable estate, and IHT bill.
Formula & Calculation Method
Applies basic Nil Rate Band (£325,000) and Residence Nil Rate Band (£175,000 if passing home to kids/grandkids). Tapers the RNRB by £1 for every £2 on estates exceeding £2,000,000. Taxes remaining value at 40%.
Example Calculation
Estate £600,000, passing home to children. Total threshold = £325k + £175k = £500,000. Taxable estate = £100,000. IHT owed (40%) = £40,000.
Frequently Asked Questions
Applies basic Nil Rate Band (£325,000) and Residence Nil Rate Band (£175,000 if passing home to kids/grandkids). Tapers the RNRB by £1 for every £2 on estates exceeding £2,000,000. Taxes remaining value at 40%.
Disclaimer: This tool is provided for informational and calculation purposes. Output values are estimates based on standard user inputs.