How do I claim the residence nil-rate band?

What the Law Says

The residence nil-rate band (RNRB) is a tax allowance that reduces the inheritance tax (IHT) bill when a person’s main residence is passed on death to their direct descendants. It was introduced by the Inheritance Tax Act 1984, as amended, and applies to deaths on or after 6 April 2017.

The RNRB is available only if the deceased owned a 'qualifying residential interest' — typically their main home — and it is inherited by 'lineal descendants', such as children, grandchildren, or stepchildren. It cannot be claimed if the property is left to a trust (unless certain exceptions apply) or to non-descendants like siblings or friends.

The allowance is transferable between spouses or civil partners: any unused RNRB from the first death can be added to the surviving partner’s allowance, potentially doubling the benefit. The maximum RNRB per person is £175,000 for 2024/25, but it tapers by £1 for every £2 over the £2 million estate threshold.

If the deceased sold or gave away their home on or after 8 July 2015 (e.g., moved into care), they may still qualify under the 'downsizing addition' — provided assets of equivalent value are passed to direct descendants and certain conditions are met within two years of death.

Statutory Text

In this Chapter, 'residence nil-rate band' means an amount equal to the lower of— (a) the value of the deceased's estate immediately before death, and (b) the amount specified in subsection (2).

— Inheritance Tax Act 1984, s. 8D — Residence nil-rate band

What to Do

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