Question 1

How accurate is this IHT calculator?

Accepted Answer

This calculator provides an estimate based on current HMRC rates and allowances (2025/26 tax year). It covers the main reliefs: nil-rate band, residence nil-rate band, spouse transfer, Business Property Relief, and the charity rate reduction. Your actual liability may differ based on: the precise valuation of assets, availability of specific reliefs, debts and expenses, and any gifts made within seven years of death. Always consult a qualified professional for a definitive calculation.

Question 2

What is included in the value of my estate?

Accepted Answer

Your estate includes: property (at market value), savings and bank accounts, investments (shares, bonds, funds), personal possessions (jewellery, art, vehicles), life insurance payouts not held in trust, business interests, and from April 2027, unused pension funds. It does not include: assets held jointly that pass by survivorship (though these may still count for IHT), assets in trust established more than seven years ago, and genuine debts owed by the estate.

Question 3

Why does marital status affect my IHT calculation?

Accepted Answer

Transfers between spouses and civil partners are completely exempt from IHT. Additionally, any unused nil-rate band from the first spouse to die can be transferred to the surviving spouse, effectively doubling the NRB to GBP 650,000. The same applies to the RNRB (up to GBP 350,000 combined). Unmarried couples do not receive either benefit.

Question 4

What is Business Property Relief in this calculator?

Accepted Answer

The calculator applies BPR at the rate applicable from April 2026: 100% relief on the first GBP 2,500,000 of qualifying business assets, and 50% relief on the excess. If you own a trading business, shares in an unquoted trading company, or qualifying AIM shares, enter the total value as your BPR qualifying assets. The calculator will apply the correct tiered relief.

Question 5

How does the charity deduction work?

Accepted Answer

If you indicate you are leaving 10% or more of your net estate to charity, the calculator applies the reduced rate of 36% instead of 40%. The net estate is the value after deducting the nil-rate band, RNRB, and other reliefs. The charitable gifts themselves are also exempt from IHT. This means the effective cost of the charitable donation is often less than the tax saved.

IHT Calculator

Common questions answered