What is the residence nil rate band?

Inheritance Tax thresholds, 2026/27

The RNRB has been £175,000 since 6 April 2020. Tax above the threshold is usually charged at 40%.

Who qualifies

The estate can get the RNRB if:

• the person owned a home, or a share in one, and it is part of their estate
• the home is left to direct descendants

Direct descendants means children, grandchildren and other lineal descendants. It includes step, adopted and foster children, and children under a guardianship. It also includes their husbands, wives or civil partners. It does not include nephews, nieces, brothers, sisters or other relatives.

The descendants do not have to keep the home. They can sell it after they inherit.

How much you get

The RNRB is the lower of the value of the home and the maximum for the tax year. It is set against the whole estate, not just the home.

Worked example: home worth more than £175,000

Estate worth £450,000, including a £250,000 home left to the children.

• Thresholds: £325,000 plus £175,000 = £500,000
• The estate is under £500,000, so no Inheritance Tax is due.

Worked example: cheaper home

Estate worth £600,000, including a £150,000 home left to the children.

• RNRB: £150,000 (the home's value, as it is lower than £175,000)
• Total threshold: £325,000 plus £150,000 = £475,000
• Taxable: £600,000 minus £475,000 = £125,000
• Inheritance Tax at 40%: £50,000

The £2 million taper

If the estate is worth more than £2 million, the RNRB goes down by £1 for every £2 over that amount.

Passing it to a spouse or civil partner

If the first partner to die does not use all their RNRB, the unused part can be added to the surviving partner's. The executor claims it on form IHT436 when the second partner dies. The basic threshold can also transfer. So a couple could pass on up to £1 million (2 x £500,000) if both allowances pass in full.

Things to know

• The RNRB does not apply to lifetime gifts or transfers into trusts.
• If a home is left in a trust with a condition, such as grandchildren reaching a certain age before they inherit, the RNRB does not apply.
• If the person moved to a smaller home or sold their home, the estate may still get some RNRB. HMRC has a calculator for this.
• Inheritance Tax rules are the same across England, Scotland, Wales and Northern Ireland.

Related guides

• How does Inheritance Tax work?
• Do you pay Inheritance Tax on gifts?
• Who inherits if someone dies without a will?
• How do I apply for probate?

Where these figures come from

• Inheritance Tax: residence nil rate band
• Inheritance Tax thresholds and interest rates
• Inheritance Tax