How do you use this tool?
- Select your region — US for federal estate tax, UK for inheritance tax.
- US: enter the gross estate value, then subtract the marital deduction (unlimited for a US-citizen spouse), charitable bequests, and other debts.
- UK: enter the estate value, assets passing to your spouse or civil partner, and any charitable bequests. Tick the box if a qualifying main home is left to children or grandchildren — this adds the £175,000 Residence NRB.
- Read the after-tax estate, tax bill, and effective rate. The breakdown shows exactly how every deduction and band applies.
What This Calculator Does
The Inheritance & Estate Tax Calculator estimates the 2026 tax bill on an estate in the United States or the United Kingdom. Select your region with the flag selector at the top — the inputs, tax logic, and footnotes update automatically.
US: Computes federal estate tax using the 2026 exemption of $15,000,000 per person and the full progressive rate schedule (18–40%). The marital deduction and charitable deduction are modelled. State estate and inheritance taxes are not included — they vary too widely across the 50 states to capture in a single calculator.
UK: Computes Inheritance Tax for England, Wales, and Northern Ireland under the 2026/27 rates. Models the Nil Rate Band (£325,000), the Residence Nil Rate Band (£175,000), the unlimited spouse exemption, and the 36% reduced rate for charitable gifts. Business and agricultural reliefs (BPR/APR) are noted but not modelled.
How Does US Federal Estate Tax Work?
The estate tax applies to the taxable estate — what remains after deducting the marital deduction, charitable bequests, debts, and administration expenses. The progressive rate schedule (§ 2001 IRC) then applies, and the applicable credit (equivalent to tax on the $15M exemption) is subtracted.
For most Americans, the math is simple: with a $15,000,000 per-person exemption, roughly 99.9% of estates pay zero federal estate tax. The tax only kicks in for very large estates — a $20M single estate owes approximately $2,000,000 (40% on the $5M above the exemption).
The IRS estate and gift tax page and Publication 559 are the primary references.
What Changed for US Estate Tax in 2025?
The One Big Beautiful Bill (signed into law on July 4, 2025) permanently extended the Tax Cuts and Jobs Act’s doubled exemption. The previous TCJA provisions would have sunset on December 31, 2025, dropping the exemption to approximately $7 million. That sunset no longer applies.
Key 2026 figures:
| Item | 2024 | 2026 |
|---|---|---|
| Federal estate tax exemption per person | $13,610,000 | $15,000,000 |
| Exemption for married couple (portability) | $27,220,000 | $30,000,000 |
| Annual gift tax exclusion per recipient | $18,000 | $19,000 |
| Top federal estate tax rate | 40% | 40% (unchanged) |
Source: IRS Tax Inflation Adjustments 2026
How Does UK Inheritance Tax Work?
UK IHT is charged at 40% on the chargeable estate above the Nil Rate Band. The estate is defined as everything the deceased owned at death, minus debts, funeral expenses, and exempt transfers (spouse exemption, charitable gifts).
The key allowances stacked together:
| Allowance | 2026/27 | Condition |
|---|---|---|
| Nil Rate Band (NRB) | £325,000 | Always available |
| Residence NRB (RNRB) | £175,000 | Must leave qualifying main home to direct descendants |
| Spouse / CP exemption | Unlimited | Assets passing to a UK-domiciled spouse or civil partner |
| Charity reduced rate | 36% rate | When ≥ 10% of net estate goes to qualifying charities |
A couple who have transferred their NRBs and RNRBs can each use £500,000 — a combined £1,000,000 — before any IHT is due. The GOV.UK Inheritance Tax guide is the authoritative reference.
What Changed for UK IHT in 2026?
The biggest change came from the Autumn Budget 2024 (effective 6 April 2026): the unlimited Business Property Relief and Agricultural Property Relief were capped.
Before 6 April 2026: 100% BPR/APR on the full value of qualifying business or agricultural property — no limit.
From 6 April 2026:
- 100% relief on the first £2,500,000 of combined BPR/APR assets
- Only 50% relief on the excess — meaning an effective 20% IHT rate on amounts above £2.5M
- AIM-listed shares: dropped from 100% to 50% relief
- For a married couple, up to £5,000,000 combined (£2.5M each) retains full relief
Source: GOV.UK — APR and BPR Reforms
This change does not affect this calculator (BPR/APR are not modelled), but it is critical for anyone inheriting a farm or family business.
Pensions from April 2027: Unspent defined-contribution pension pots will become liable to IHT from 6 April 2027. This is already legislated but is not yet in force for the 2026/27 tax year.
Frequently Asked Questions
Who pays US federal estate tax in 2026?
Almost nobody. With a $15M per-person exemption, only the largest estates face any federal estate tax. A married couple with a $25M estate owes nothing — their combined exemption covers it. A single person with a $20M estate owes roughly $2M (40% on the $5M above $15M).
The notable exception is portability — the surviving spouse can claim the deceased spouse’s unused exemption by filing a timely Form 706 estate tax return, even when no tax is owed. Failure to file on time permanently forfeits portability.
The Tax Foundation’s estate and gift tax resource tracks historical and current data.
Which US states still have an estate or inheritance tax?
As of 2026, 13 jurisdictions impose a state estate tax: Connecticut ($15M threshold — matches federal), Hawaii, Illinois ($4M), Maine, Maryland, Massachusetts ($2M — the lowest threshold), Minnesota ($3M), New York, Oregon ($1M), Rhode Island, Vermont, Washington, and Washington DC.
Iowa fully eliminated its inheritance tax effective January 1, 2025 — it no longer appears on the list.
Kentucky removed its inheritance tax on Class B beneficiaries (nieces, nephews, step-parents, half-siblings) effective January 1, 2026 — they are now fully exempt. Only Class C (unrelated parties) still pays 6–16%.
The remaining states with inheritance taxes: Kentucky (Class C only), Maryland, Nebraska, New Jersey, Pennsylvania. Source: Tax Foundation — State Estate & Inheritance Taxes 2026
How does the UK Residence Nil Rate Band work?
The RNRB (£175,000) adds on top of the standard NRB (£325,000) when a qualifying residential interest — a property the deceased has at some point used as their main home — is left to direct lineal descendants: children, stepchildren, adopted children, grandchildren, or their spouses.
The RNRB is tapered for large estates: for every £2 the net estate exceeds £2,000,000, the RNRB reduces by £1. It is fully eroded at £2,350,000. A couple each with a £2.3M estate may find one partner’s RNRB partially reduced.
The unused RNRB is transferable between spouses, just like the NRB.
What is the 7-year taper relief rule?
Gifts made more than 7 years before death are fully outside the estate and attract no IHT. Gifts made within the 7-year window may still be charged — but at a reduced rate if the gift was made 3–7 years before death:
| Years between gift and death | IHT rate on gift |
|---|---|
| 0–3 | 40% |
| 3–4 | 32% |
| 4–5 | 24% |
| 5–6 | 16% |
| 6–7 | 8% |
| Over 7 | 0% |
Taper relief reduces the tax on the gift, not the value of the gift itself. It only applies when the gift exceeds the donor’s available NRB. Source: GOV.UK — Gifts and Taper Relief
How does the 36% charity rate work?
If you leave at least 10% of your net chargeable estate to qualifying UK charities, the entire taxable estate is taxed at 36% instead of 40%. The 10% test uses the estate value after subtracting the NRB and RNRB — not the gross estate. This calculator performs the test automatically when you enter charitable bequests.
Example: £700,000 estate, no RNRB. After NRB (£325,000), the “baseline” is £375,000. A charitable gift of £37,500 or more (10% × £375,000) qualifies. Result: the remaining taxable estate of £337,500 is taxed at 36% (£121,500) rather than 40% (£135,000) — even though you gave away £37,500, the net inheritance for family beneficiaries is actually higher.
Source: HMRC — Schedule 1A IHTA 1984
Are my inputs private?
Yes. All computations run entirely in your browser. No estate value, deduction figure, or personal data is transmitted to any server. There is no account, no tracking cookie, and no third-party analytics for this calculator.
This tool is an estimate, not legal or tax advice. US estate planning involves many factors not modelled here — state estate taxes, generation-skipping transfer tax (GSTT), trust structures, life insurance, and prior gifting history. UK planning similarly involves trusts, business relief, and domicile status. Consult a licensed estate planning attorney, CPA, or chartered tax adviser for your specific situation.
Which related tools fit?
- ROI Calculator — Return on investment with annualised rate and time-to-payback.
- Compound Interest Calculator — See how an estate or inheritance grows over time with compounding.
- Interest Calculator — Simple and compound interest on a lump sum.
What are the sources?
- IRS — Estate and Gift Taxes — irs.gov
- IRS — Tax Inflation Adjustments 2026 — irs.gov
- GOV.UK — Inheritance Tax — gov.uk
- GOV.UK — NRB and RNRB Thresholds 2026–2028 — gov.uk
- GOV.UK — APR and BPR Reforms from April 2026 — gov.uk
- GOV.UK — Gifts and Taper Relief — gov.uk
- Tax Foundation — State Estate and Inheritance Taxes 2026 — taxfoundation.org
- Kentucky Department of Revenue — Inheritance Tax — revenue.ky.gov
- HMRC Rates and Allowances — Inheritance Tax — gov.uk
Last updated: