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Inheritance Tax reduced rate calculator - introduction

From 6 April 2012 people who leave at least 10 per cent of their net estate to charity may be able to pay a reduced rate of Inheritance Tax of 36 per cent. It's also possible to merge one or more components to gain the maximum benefit from the reduced rate. More about this in the link below.

You can use the calculator to work out whether an estate will qualify to pay the reduced rate of tax.

Reducing your Inheritance Tax bill by giving to charity

When you can use this calculator

You can use this calculator:

  • if you're planning ahead for when you die and you want to work out how much you need to leave to charity for your estate to qualify to pay the reduced rate of Inheritance Tax
  • where the deceased's will didn't include a charitable legacy and you want to vary the will to make a donation to charity so that the estate can qualify to pay the reduced rate of Inheritance Tax
  • where a legacy to charity was too low to pass the 10 per cent test and you want to vary the will to increase the charitable donation so that the estate can qualify
  • where the deceased's will states that they want to leave an appropriate amount to charity so that their estate qualifies to pay reduced rate Inheritance Tax and you want to work out what that amount is

When you can't use this calculator

You can't use this calculator where:

  • the death was before 6 April 2012
  • there are charges from the deferral of tax for woodlands or heritage assets - tax on these is always due at 40 per cent
  • Inheritance Tax is due on a trust and no death has occurred
  • you don't think there will be any Inheritance Tax due on the estate - the results may show negative amounts

Information you need to use the calculator

Before you use the calculator you'll need to know or work out the following:

  • the value of the assets in the estate
  • the way that the assets are owned
  • the total value of the assets in each component
  • the value of any debts and liabilities that must be paid out of the estate
  • the amount of any Inheritance Tax relief and exemptions
  • the amount of the charitable donation (if appropriate)
  • the value of the nil rate band - this is £325,000 for the 2014-15 tax year but there may be some transferrable nil rate band from a late spouse or civil partner
  • the amount of gifts the deceased made in the seven years before death

How to value the estate of someone who has died

Transferring an unused Inheritance Tax threshold

Using the calculator

Because the reduced rate applies separately to each component it's possible that one component may pay Inheritance Tax at the reduced rate and another may pay the full rate.

Where there is more than one component of the estate, the amounts must be worked out separately for each component. The reduced rate will only apply to the component(s) that meet the 10 per cent test.

Go to the Inheritance Tax reduced rate calculator

Go to the Inheritance Tax reduced rate calculator

Useful links

Inheritance Tax - the basics