Estate Planning Calculator
Frequently Asked Questions
What is the IHT nil rate band in 2025/26?
The standard nil rate band (NRB) is £325,000 per person (frozen until 2030). Married/civil partnership couples can transfer unused NRB, giving a combined £650,000. The Residence NRB (RNRB) adds up to £175,000 per person (£350,000 for couples) when leaving a home to direct descendants.
What is the maximum IHT-free estate for a married couple?
A married couple leaving their home to children can pass up to £1 million (£650,000 NRB + £350,000 RNRB) free of IHT. This requires proper planning — the first spouse's unused allowances must be claimed by the executors.
How can I reduce my IHT bill?
Legal IHT reduction strategies: regular gifts from income (immediately exempt), annual gift exemption (£3,000/year), 7-year potentially exempt transfer (PET) gifts, business property relief (100% or 50%), agricultural property relief, charitable donations, and pensions (outside estate from April 2027).
Are pensions included in my estate?
Currently, pensions (SIPPs, DC pensions) are generally outside the estate for IHT purposes and pass to beneficiaries free of IHT. From April 2027, unused pension funds will be brought into the estate — a major change affecting estate planning.
What gifts are exempt from IHT?
Exempt gifts: spouse/civil partner (unlimited), charities (unlimited), annual £3,000 exemption, small gifts of £250 per person, wedding gifts (£5,000 to child, £2,500 to grandchild, £1,000 to others), and normal expenditure from income.
What is a Potentially Exempt Transfer (PET)?
PETs are gifts that become fully exempt if the donor survives 7 years. If the donor dies within 7 years, the gift is tapered: 100% IHT within 3 years, reducing to 20% at years 6-7. Taper relief reduces the IHT due but not the amount of NRB used.
Do I need a solicitor for estate planning?
For complex estates (significant assets, business interests, blended families), a solicitor specialising in wills and probate is strongly advisable. For straightforward estates, an IHT-aware financial adviser can help with lifetime planning.
What is Business Property Relief?
Business Property Relief (BPR) gives 100% IHT relief on qualifying business assets (sole trader/partnership businesses, shares in unlisted companies) or 50% on quoted shares where the deceased had control. AIM-listed shares may qualify for 100% relief after 2 years.