This content and calculator are provided by Octopus Investments and are reproduced with its permission. Read more about Octopus Investments.
The calculator is based in accordance with Octopus Investments’ understanding of the law and interpretation of it at the time of publication: remember tax rules can change and benefits depend on circumstances.
How it works
Everyone can leave up to £325,000 of their total estate free of inheritance tax (the nil-rate band), provided this allowance hasn’t been used when making gifts, for example, or settling assets into trust.
A person’s estate is the sum of their savings, investments, the market value of the house they live in and their other assets.
There’s an additional inheritance tax allowance to be aware of – the residence nil-rate band (RNRB).
By filling in the boxes below, our calculator will estimate the degree to which the RNRB may be of benefit – and therefore gives some indication of the inheritance tax due on the estate.
Things to bear in mind
Inheritance tax can be a complicated topic and this calculator is intended to help you understand some of the key areas. It’s been prepared in good faith and is based on our understanding and interpretation of the current law.
Keep in mind that specific circumstances that are outside of the scope of this calculator may result in different levels of inheritance tax being due. Also bear in mind that legislation may change in the future.
Assess your situation
How much is your house worth??
Based on the estimated figures you have entered, this gives an estate value of:
House value: £ 0
Value of other assets: £ 0
Total estate value: £ 0
As your estate is worth more than £2 million, the RNRB may be restricted or not available at all. We have assumed that your estate will not benefit from any additional RNRB, but recommend that you seek professional advice specific to your situation.
Your marital status
What is your marital status? ?
Assets left to spouses are not normally subject to inheritance tax. It may be useful for you to provide information for the value of your joint estate if you would expect to inherit all of your spouse's assets.
Did your spouse leave all their assets to you?
Did your spouse or civil partner use all of their nil-rate band? ?
How much did they leave unused?
Was the value of your spouse's estate more than £2 million when they died?
If your spouse's estate exceeded £2 million, your entitlement to an additional RNRB may be reduced, or even eliminated. We have assumed that your estate will not benefit from any additional RNRB from your spouse, but recommend that you seek professional advice as to your specific situation.
Plan for the future
Did you sell your home before 8 July 2015?
Do you plan to downsize in the future?
Do you plan to leave your house to your direct descendants (children or grandchildren) when you die?
Based on your selection, the residence nil-rate band is unlikely to benefit you. You’re welcome to continue using the calculator but we’d recommend you seek professional advice.
Year by year results
The calculator assumes that you die in the tax year which is checked below.
The residence nil-rate band is £175,000 for the 2020/2021 tax year. Beginning in the 2021/2022 tax year, it will increase every year in line with inflation, as measured by the Consumer Price Index.
The maximum nil-rate band (NRB) at the point selected above will be:
The maximum residence nil rate band (RNRB) at the point selected above will be:
Based on the information you have provided:
Your NRB at the point selected above will be: ?
Your RNRB at the point selected above will be: ?
After deducting the available allowances, we estimate that your estate would potentially be subject to an inheritance tax bill of:
This calculator can only provide an indication based on the information provided above. Tax planning is a complex area and tax treatment depends on personal circumstances, so we recommend investors seek professional adviser. Also, tax treatment may change in the future.
I understand I will need to declare I am a High Net Worth Individual or Sophisticated Investor before I am able to receive further information.