How much inheritance tax would your estate pay?
Estimate UK inheritance tax with the 2026/27 allowances, gifts in the last 7 years, and the change that brings most pensions into the estate from 6 April 2027.
England, Wales, Scotland and Northern Ireland · 2026/27 thresholds
An estimate on death for one person. Values stay in this page and are not saved or added to the address.
Estimated Inheritance Tax
£138,000
£138,000 on the estate at 40%.
Of the estate tax, about £40,828 is attributable to the pensions, shared pro rata. Executors report it; it can be paid from the pension scheme if it is at least £1,000.
Under the rules before 6 April 2027 the same estate would pay £38,000. Counting pensions adds £100,000.
| Estate after debts, including pensions | £845,000 |
|---|---|
| Left to a spouse, civil partner or charity (exempt) | £0 |
| Nil-rate band available to the estate | −£325,000 |
| Residence nil-rate band | −£175,000 |
| Taxable estate | £345,000 |
Not included: business and agricultural property relief, trusts, gifts with reservation, foreign assets, life insurance and income tax. Beneficiaries may also pay income tax on inherited pensions if the person died at 75 or older; see death before and after 75. This is an estimate, not tax advice.
How much more tax when pensions count?
Worked examples using 2026/27 thresholds, no gifts and no charity gifts. Rules before 6 April 2027 leave pensions outside the estate.
| Example | Home | Other assets | Pension | Before April 2027 | From April 2027 | Of which on pension |
|---|---|---|---|---|---|---|
| Single, home to children | £400,000 | £200,000 | £300,000 | £40,000 | £160,000 | £53,333 |
| Widowed, full transfers from late spouse | £600,000 | £400,000 | £500,000 | £0 | £200,000 | £66,667 |
| Single, larger estate (residence band tapered) | £900,000 | £700,000 | £600,000 | £440,000 | £720,000 | £196,364 |
How inheritance tax is worked out
- Add up the estate: property, savings, investments and, from 6 April 2027, most unused pensions. Take off debts and funeral costs.
- Take off anything left to a spouse, civil partner or charity, which is exempt.
- Gifts in the 7 years before death use the £325,000 nil-rate band first. Whatever is left applies to the estate.
- Add the residence nil-rate band of up to £175,000 if a home passes to direct descendants, reduced above £2,000,000.
- Tax the remainder at 40%, or 36% if at least 10% of the estate goes to charity. Tax on the estate is shared between its parts in proportion, which is how the pension’s share is found.
Executors dealing with a pension after 6 April 2027: see what executors need to do. For income tax on inherited pensions, use the pension inheritance calculator.
Inheritance tax questions
What is the inheritance tax threshold in 2026/27?
Each person has a £325,000 nil-rate band. A residence nil-rate band of up to £175,000 is added when a home passes to children or grandchildren, so the combined threshold can reach £500,000, or £1,000,000 for a married couple or civil partners using transfers. The residence band is reduced by £1 for every £2 the estate is above £2,000,000.
Will pensions be subject to inheritance tax?
For deaths on or after 6 April 2027, most unused pension funds and lump sum death benefits count towards the estate. Death-in-service benefits and dependants' scheme pensions are excluded, and pensions left to a spouse, civil partner or charity remain exempt. In our first example, counting a £300,000 pension raises the tax from £40,000 to £160,000.
Who pays inheritance tax on a pension?
The personal representatives (executors) report it and are liable for it, and beneficiaries who receive the pension are jointly liable for the tax attributable to it. Where the tax is at least £1,000, the executors or beneficiaries can ask the pension scheme to pay it directly to HMRC.
How does the 7-year rule work?
Gifts are normally free of inheritance tax if the giver lives for 7 years. Gifts within 7 years use the nil-rate band first, oldest first. Tax on any amount above the nil-rate band is reduced by taper relief when the gift was made 3 to 7 years before death: 32%, 24%, 16% or 8% instead of 40%.
Is this calculator tax advice?
No. It is a simplified estimate that leaves out business and agricultural relief, trusts, foreign assets and other special cases. Estates near the thresholds or with complex assets should be checked with HMRC guidance or a qualified adviser.