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UK inheritance tax calculator — with the April 2027 pension change

From 6 April 2027, unused pension funds count as part of your estate for inheritance tax. That is enacted law (Finance Act 2026), not a proposal — and for many households it is the difference between no IHT problem and a six-figure one. This calculator shows both numbers, side by side, with the working.

Free, no signup, and nothing leaves your browser — the arithmetic runs on your device and nothing is sent to us or stored.

What changes in April 2027 — and why it is not a scare story

Defined-contribution pensions have historically sat outside the estate — the classic advice was to spend everything else first and leave the pension untouched. The Finance Act 2026 ends that: for deaths on or after 6 April 2027, most unused pension funds and death benefits are included in the estate. The government's own technical note has the detail. If your plan was built around the old rule, the two numbers above are the size of the rethink.

How the calculation works

Each person has a £325,000 nil-rate band. If a qualifying home passes to direct descendants, up to £175,000 of residence nil-rate band is added — capped at the home value, and shrinking by £1 for every £2 the estate exceeds £2 million. For a married couple, everything left to the surviving spouse is exempt on the first death, and both people's unused bands transfer — so the second death is measured against up to £1 million of combined bands. Anything above the bands is taxed at 40%. All bands are frozen until 2030/31.

What it deliberately does NOT model

• Unmarried couples. There is no spouse exemption and no band transfer — the FIRST death is already a taxable event, against one set of bands. If that's you, choose "single" above for a per-estate view, and know that the real position needs a will and advice.
• Lifetime gifts and the 7-year rule. Gifts made in the 7 years before death can come back into the estate on a taper. This calculator doesn't know your gifts.
• Business and agricultural relief — reformed in April 2026 (100% relief now capped at £1m, 50% beyond). If you own a company or farmland, the answer genuinely belongs with an adviser.
• The 36% charity rate, trusts' own charge regimes, and foreign assets.

Estimates for orientation, not advice. For a real estate plan, a STEP-qualified adviser or solicitor is worth every penny.

Track it live, not annually

OwnWorth keeps this estimate current automatically — built on each person's real ownership shares (a 60/40 house puts 60% in one estate and 40% in the other), with live investment prices and both pension regimes shown side by side, updated as your wealth moves. See your whole household's picture free — 30-day trial, no card, no bank connections.

Related free tools: the Section 104 capital gains calculator and the joint property equity calculator. Comparing trackers? The honest comparison.

OwnWorth is a record-keeping and planning tool, not financial, legal or tax advice, and we are not regulated to give any. Figures you enter are your own; projections are estimates based on them.