Key facts
- The RNRB is £175,000 per person for 2025/26, frozen until at least April 2028.
- It applies when a qualifying residence passes to direct descendants (children, grandchildren, step-children).
- Combined with the NRB, a single person can pass up to £500,000 IHT-free; a couple up to £1,000,000.
- The RNRB tapers away for estates over £2 million — reduced by £1 for every £2 above.
- If the person downsized or sold their home after 8 July 2015, a “downsizing addition” may preserve the RNRB.
What Is the Residence Nil-Rate Band?
The residence nil-rate band (RNRB) is an additional IHT-free threshold introduced in April 2017. It applies when a person’s home (or a share of it) passes on death to their direct descendants — children, grandchildren, step-children, and so on.[1]
For 2025/26, the RNRB is £175,000 per person. Like the standard nil-rate band, it is frozen until at least April 2028.[3]
Combined IHT-Free Thresholds
| Allowance | Single Person | Married Couple / Civil Partners |
|---|---|---|
| Nil-rate band (NRB) | £325,000 | £650,000 |
| Residence nil-rate band (RNRB) | £175,000 | £350,000 |
| Total IHT-free threshold | £500,000 | £1,000,000 |
For married couples, the combined £1 million threshold assumes that both the NRB and RNRB from the first death are fully transferred to the surviving spouse’s estate.
Qualifying Conditions
For the RNRB to apply, three conditions must be met:[2]
- A qualifying residential interest: The deceased must have owned a property that was used as their residence at some point (it does not have to be their residence at death)
- Closely inherited: The property (or a share) must pass to one or more direct descendants on death, either under the will, intestacy rules, or by right of survivorship
- Estate value: The estate must not exceed the £2 million taper threshold (or the RNRB will be reduced)
Who Are Direct Descendants?
The definition of “direct descendant” is broad:[1]
- Children (including adopted and step-children)
- Grandchildren and more remote descendants
- Foster children who were placed with the deceased by a local authority
- Children for whom the deceased was a guardian or special guardian
- Spouses and civil partners of any of the above
Siblings, parents, nephews, nieces, and friends do not qualify. If the home passes to any of these, the RNRB is not available (unless the downsizing addition applies).
The £2 Million Taper
The RNRB is reduced for estates worth more than £2 million. The reduction is £1 for every £2 above £2 million:[2]
| Estate Value | RNRB Available | Total Threshold (NRB + RNRB) |
|---|---|---|
| £2,000,000 or less | £175,000 | £500,000 |
| £2,100,000 | £125,000 | £450,000 |
| £2,200,000 | £75,000 | £400,000 |
| £2,350,000 or more | £0 | £325,000 |
Important: The taper is based on the gross estate value before deducting liabilities and before applying reliefs like BPR or APR. This means the taper can remove the RNRB even if the net taxable estate is below £2 million after reliefs.
Transferable RNRB
Just like the standard NRB, any unused RNRB from the first death can be transferred to the surviving spouse or civil partner. This works even if the first death occurred before the RNRB was introduced in April 2017.[1]
The claim is made on form IHT436 as part of the second estate’s IHT account.
Downsizing Addition
The “downsizing addition” preserves the RNRB if the deceased downsized to a less valuable property or sold their home entirely on or after 8 July 2015. The conditions are:[2]
- The deceased previously occupied a home that would have qualified for the RNRB
- That home was disposed of (sold or replaced with a less valuable home) on or after 8 July 2015
- The estate passes assets of equivalent value to direct descendants
The downsizing addition is the lesser of the “lost” RNRB and the value of other assets passed to direct descendants.
RNRB Phased Introduction
| Tax Year | RNRB Amount |
|---|---|
| 2017/18 | £100,000 |
| 2018/19 | £125,000 |
| 2019/20 | £150,000 |
| 2020/21 onwards | £175,000 (frozen) |
Frequently Asked Questions
Who counts as a direct descendant for the RNRB?
Direct descendants include children, grandchildren, great-grandchildren, step-children, adopted children, and foster children. It also includes their spouses and civil partners. However, it does not include nephews, nieces, siblings, or other relatives.
Does the RNRB apply if I leave my home to my spouse?
No. The RNRB only applies when the home passes to direct descendants, not to a spouse. However, the unused RNRB from the first death can be transferred to the surviving spouse’s estate (just like the NRB), so the full RNRB can be claimed on the second death.
What happens if my estate is over £2 million?
The RNRB tapers away by £1 for every £2 your estate exceeds £2 million. At an estate value of £2.35 million, the RNRB is reduced to nil. This taper is calculated on the gross estate value before reliefs like BPR or APR.
Can I still get the RNRB if I sold my home before death?
Potentially, yes. If you downsized to a less valuable home or sold your home entirely after 8 July 2015, a “downsizing addition” may be available. The estate must pass assets of equivalent value to direct descendants for this to apply.
Further Reading
- The Nil-Rate Band (£325,000) — the main IHT threshold
- Transferable Nil-Rate Band — claiming a deceased spouse’s unused NRB
- Calculating the Estate Value — how to arrive at the estate’s value for IHT
- Will Planning and IHT — structuring your will to maximise tax-free thresholds
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