Simply Calculated

£40,000 inheritance tax

Workings

Inheritance tax calculator

The inheritance tax on an estate for deaths from 6 April 2026, with gifts in the last 7 years, charity, and the April 2027 change for pensions. We’ve filled in an example: change it to yours.

Nil-rate band £325,000, residence band £175,0002026/27 rates, last checked 5 October 2026

Inheritance tax to pay

£40,000

On an estate of £600,000, the inheritance tax would be £40,000, due by 30 April 2027.

Estate
£600,000
Rate
40%
Pay by
30 April 2027

About the person

Or the date you’re planning for.
Marital status

The home

What it would sell for now.
0 if there isn’t one.
Who gets the homeChildren include stepchildren, adopted and foster children and their spouses, but not nephews, nieces or siblings.

Everything else

Savings, shares, belongings.
Loans, cards, bills owed.
Including the headstone.
At 10% of the baseline, the rate drops to 36%.

Gifts in the last 7 years

Gifts to people in the 7 years before death. Gifts to a spouse or charity are always free of tax, so leave them out. A gift the person kept using, like a home they still lived in, stays in the estate.

Pensions

Only counts for deaths from 6 April 2027.

Pots and death benefits not yet paid out.

Updates as you type. Nothing leaves your browser.

What people ask next

Workings

How the estate’s tax is worked out
HomeGoing to children or grandchildren£300,000
Other assets£300,000
EstateUnder £2 million, so no taper. All of it is chargeable£600,000
Residence nil-rate band£175,000, within the £300,000 of home going to them(£175,000)
Nil-rate band£325,000(£325,000)
Taxable estate£100,000
RateThe standard rate40%
Estate tax£100,000 × 40%£40,000
Who pays, and by when
The executors, from the estateBy 30 April 2027, the end of the sixth month after the death£40,000
Total inheritance tax£40,000

Not covered: business and agricultural relief (£2.5 million at 100% from April 2026), trusts and chargeable lifetime transfers, gifts with reservation, the downsizing addition, quick succession relief, foreign assets and income tax on inherited pensions. We assume a spouse is a long-term UK resident.

The two tax-free bands

Every estate has a nil-rate band of £325,000. If the home goes to children or grandchildren, there’s also a residence band of up to £175,000, capped at the home’s value after the mortgage. Both are frozen until 5 April 2031, and the rest is taxed at 40%.

The residence band shrinks by £1 for every £2 the estate is over £2 million, so it’s gone at £2.35 million. A widow or widower adds whatever share of their late spouse’s bands went unused, so a couple can pass on up to £1 million. Leave at least 10% of the baseline to charity and the rate drops to 36%. Inheritance tax bands and allowances.

Gifts and the 7-year rule

Gifts made in the 7 years before death are added back, after taking off what’s exempt: £3,000 a year (plus last year’s if it wasn’t used), small gifts up to £250, wedding gifts (£5,000 to a child, £2,500 to a grandchild, £1,000 to anyone else) and regular gifts out of spare income.

What’s left uses up the nil-rate band first, oldest gift first, leaving less for the estate. If gifts go over the band, the person who got the gift pays 40% on the excess. Taper relief cuts that tax if the gift was more than 3 years before death: they pay 80% of it at 3 to 4 years, falling to 20% at 6 to 7 years. The 7-year gift rule explained.

Pensions from 6 April 2027

For deaths from 6 April 2027, unused pension pots and most death benefits count as part of the estate. A pension left to a spouse or civil partner is still free of tax, and death-in-service benefits are left out. The estate’s tax is shared between the pension and the rest of the estate by value. HMRC hasn’t published full guidance yet, so treat these figures as an estimate. Pensions and inheritance tax from April 2027.