Inheritance Tax

Inheritance Tax is charged on the taxable value of an estate after allowances and exemptions. Thresholds, a home left to direct descendants, lifetime gifts and future pension rules can all change the picture — so it helps to separate estate calculation, the residence nil-rate band and gift rules before you estimate a bill.

Where should I start?

Start with Inheritance Tax Explained for the overview, then use the Inheritance Tax Calculator for an estate-at-death estimate. Read Residence Nil-Rate Band if a home may pass to children or grandchildren, or Inheritance Tax on Gifts if lifetime giving matters.

  • Estimating tax on an estate: Use the Inheritance Tax Calculator for assets, debts, spouse exemption and nil-rate bands — then Inheritance Tax Explained for the rules behind the estimate.
  • Understanding how Inheritance Tax works: Read Inheritance Tax Explained for the estate, rates, allowances and what the calculator does and does not cover.
  • Home left to children or grandchildren: Read Residence Nil-Rate Band for the extra home-related allowance, taper for larger estates and transfer between spouses or civil partners.
  • Lifetime gifts and the seven-year rule: Read Inheritance Tax on Gifts for potentially exempt transfers, exemptions, taper relief and gifts with reservation.

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Frequently asked questions

What is Inheritance Tax?

Inheritance Tax is a tax on the estate of someone who has died — their property, money and possessions after debts and qualifying exemptions. The standard rate is 40% on the taxable amount above available nil-rate bands.

What does the Sorvuna Inheritance Tax Calculator cover?

It estimates UK individual estate-at-death tax using assets, debts, spouse or civil-partner exemption, the nil-rate band, residence nil-rate band and transferable unused percentages. It does not model lifetime gifts, trusts, Business or Agricultural Relief, downsizing addition, the charity reduced rate, or the pension reforms applying from 6 April 2027.

Is a married couple always able to leave £1 million tax-free?

No. A headline combined figure of up to £1 million is conditional. It typically needs both partners' nil-rate bands and both residence nil-rate bands to be fully available (often via transfer of unused percentages), a qualifying home interest passing to direct descendants, and no RNRB taper above £2 million. Many estates do not meet all of those conditions.

Do beneficiaries normally pay Inheritance Tax?

Usually the estate pays. Beneficiaries do not normally pay Inheritance Tax on what they inherit, though they may have other taxes later. Someone who received a large lifetime gift may have to pay tax on that gift if the donor dies within seven years and the nil-rate band has been used up.

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This hub is for general information only. It is not tax, legal or financial advice.