What is the residence nil rate band for inheritance tax?
Answered 11 March 2026
Here is a comprehensive answer on the Residence Nil Rate Band (RNRB) for Inheritance Tax.
Residence Nil Rate Band (RNRB) for Inheritance Tax
What the law says
Statutory basis — IHTA 1984, s. 8D (inserted by Finance (No.2) Act 2015, as amended)
The RNRB applies for the purpose of calculating the IHT charge under s. 4 IHTA 1984 on deaths on or after 6 April 2017. Where a person's "residence nil-rate amount" is greater than nil, the portion of the value transferred (VT) that does not exceed that amount is charged at 0%.
The "residential enhancement" (i.e. the maximum RNRB per individual) is:
- £100,000 — 2017–18
- £125,000 — 2018–19
- £150,000 — 2019–20
- £175,000 — 2020–21 and subsequent tax years
(subject to CPI uprating provisions).
The "taper threshold" is set at £2,000,000 for 2017–18 and subsequent tax years (also subject to CPI uprating). Where the estate value (E) exceeds the taper threshold (TT), the person's "adjusted allowance" is reduced by (E − TT) ÷ 2, and is nil if that reduction exceeds the default allowance.
Qualifying conditions — IHTA 1984, s. 8E
The RNRB is available only if:
- The person's estate immediately before death includes a qualifying residential interest, and
- N% of that interest is "closely inherited" (i.e. passes to direct descendants), where N is greater than 0 and up to 100.
The residence nil-rate amount is capped at the lower of the value of the closely-inherited interest (NV/100) and the person's default/adjusted allowance.
Where the estate does not include a qualifying residential interest, or none of it is closely inherited, the residence nil-rate amount is nil (s. 8F), though unused allowance may be carried forward.
Transferable RNRB — IHTA 1984, s. 8G
Any unused RNRB from a deceased spouse or civil partner can be transferred to the surviving spouse/civil partner's estate. The brought-forward allowance is calculated by expressing the unused amount as a percentage of the residential enhancement at the first death, then applying that percentage to the residential enhancement at the survivor's death (capped at 100%).
HMRC guidance / practice
HMRC confirms that the RNRB was phased in over four tax years from 6 April 2017, reaching its current maximum of £175,000 per individual from 2020/21 to 2029/30. The maximum will remain at £175,000 until 5 April 2030, after which it will increase annually by CPI unless the Treasury specifies otherwise.
Where the full unused RNRB is transferred between spouses/civil partners, the combined maximum RNRB is:
- £200,000 (2017/18), £250,000 (2018/19), £300,000 (2019/20), and £350,000 (2020/21 to 2029/30).
Tapering: The RNRB is reduced by £1 for every £2 by which the estate exceeds the £2 million taper threshold. For example, an estate of £2,350,000 in 2020/21 entitled only to the individual RNRB of £175,000 would see it tapered to nil.
HMRC emphasises that the RNRB is not an exemption or relief on the home itself — it reduces the total IHT charge on death. It does not apply to chargeable lifetime transfers or failed PETs.
There are also downsizing provisions to protect individuals who move to a less valuable home or into a care home before death, allowing them to still qualify for RNRB if other property passes to direct descendants.
Summary table:
| Tax Year | Individual RNRB | Combined (with transfer) | Taper Threshold |
|---|---|---|---|
| 2017/18 | £100,000 | £200,000 | £2,000,000 |
| 2018/19 | £125,000 | £250,000 | £2,000,000 |
| 2019/20 | £150,000 | £300,000 | £2,000,000 |
| 2020/21 onwards (to 2029/30) | £175,000 | £350,000 | £2,000,000 |
Citation sources
al Interest (IHTM46011) This is a residential property interest that is in the person’s estate at their date of death. There can only ever be one qualifying residential interest for an estate. If the estate includes more than one residential property interest, the executors of the estate have to nominate which property they wish to treat as the qualifying residential interest. – abbreviated as QRI Residence nil-rate amount The legislation says that, if the conditions are satisfied, an estate c
The residence nil-rate band (RNRB) was phased in over four tax years, starting on 6 April 2017. The maximum amounts available to an individual are £100,000 for the tax year 2017/2018 £125,000 for the tax year 2018/2019 £150,000 for the tax year 2019/2020, and £175,000 for the tax years 2020/2021 to 2029/30. The maximum amount will remain at £175,000 until 5 April 2030. After this the value will automatically increase each year by reference to the Consumer Prices Index (CPI), unless the Treasury
FA(No2)2015 (as amended by Sch15, FA2016) introduced an additional nil-rate band, known as the ‘residence nil-rate band’ (RNRB), available on deaths on or after 6 April 2017. Broadly, RNRB will be available if a person’s estate includes their home (IHTM46031) and this is left to their children or other direct descendants. The legislation refers to property being ‘closely inherited’ (IHTM46013). The amount of RNRB available is limited to the value of the home that is left to the direct descendant
PART I GENERAL Rates Meaning of “brought-forward allowance” 8G 1 This section is about the amount of the brought-forward allowance (see section 8D(5)(f)) for a person (“P”) who dies on or after 6 April 2017. 2 In this section “ related person ” means a person other than P where— a the other person dies before P, and b immediately before the other person dies, P is the other person's spouse or civil partner. 3 P's brought-forward allowance is calculated as follows— a identify each amount availabl
PART I GENERAL Rates Residence nil-rate amount: interest in home goes to descendants etc 8E 1 Subsections (2) to (7) apply if— a the person's estate immediately before the person's death includes a qualifying residential interest, and b N% of the interest is closely inherited, where N is a number— i greater than 0, and ii less than or equal to 100, and in those subsections “ NV/100 ” means N% of so much (if any) of the value transferred by the transfer of value under section 4 on the person’s de
PART 2 Inheritance tax Rate bands Increased nil-rate band where home inherited by descendants 9 1 IHTA 1984 is amended as follows. 2 In section 7(1) (rates at which inheritance tax charged on the value transferred by a chargeable transfer) after “Subject to subsections (2), (4) and (5) below and to” insert “ section 8D and ” . 3 In section 8A(2) (test for whether person has unused nil-rate band on death), in the definition of M (maximum amount transferable at 0%), after “were sufficient but” ins