Question 1

What is the Nil-Rate Band (NRB) in 2026-27?

Accepted Answer

The Nil-Rate Band is £325,000. Estates below this figure normally pay no Inheritance Tax on the estate itself.

Question 2

What is the Residence Nil-Rate Band (RNRB)?

Accepted Answer

An additional £175,000 that applies when a qualifying residence passes to direct descendants. Estates above £2m lose £1 of RNRB for every £2 above the threshold.

Question 3

How does the 7-year rule work for lifetime gifts?

Accepted Answer

Gifts made more than 7 years before death normally fall out of the estate. Gifts made between 3 and 7 years before death benefit from tapered relief on the tax attributable to the gift.

Question 4

How does taper relief work?

Accepted Answer

Taper reduces the tax attributable to a chargeable gift by 20% (3-4 yrs), 40% (4-5 yrs), 60% (5-6 yrs) or 80% (6-7 yrs). It does not reduce the gift value itself.

Question 5

When does the 36% reduced charity rate apply?

Accepted Answer

When at least 10% of the baseline amount (net estate less spouse exemption less all available NRB/RNRB) passes to a qualifying charity, the reduced 36% rate applies to the taxable estate.

Question 6

How is Agricultural and Business Property Relief calculated from April 2026?

Accepted Answer

Qualifying agricultural and business property share a combined £2.5m 100% allowance. Value above that receives 50% relief. Trust apportionment is complex and should be reviewed by a specialist.

Question 7

When do pension pots start being included in the estate?

Accepted Answer

For deaths on or after 6 April 2027, unused pension funds and death benefits are generally included in the estate for IHT. Registered-scheme death-in-service benefits remain excluded under the current effective rules.

Question 8

Can I deduct funeral costs? What about probate fees?

Accepted Answer

Reasonable funeral expenses are deductible. Post-death estate administration costs — probate fees, solicitor and executor fees, general administration — are NOT deductible for IHT.

Question 9

How does this calculator treat family or uncertain debts?

Accepted Answer

Family or uncertain debts are included with a warning. HMRC scrutinises these closely and may require additional evidence. Use the Debt Verification Sensitivity to see the difference between including and excluding them.

UK Inheritance Tax Calculator

Date of death

Assets

Marital status & transferred allowances

Liabilities

Estate

Nil-rate bands

Tax breakdown

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