WillsAn Introduction to the Residence Nil Rate Band

When drafting a will, understanding the intricacies of inheritance tax (IHT) is crucial. A key part of IHT is the Residence Nil Rate Band (RNRB). This article aims to provide a comprehensive introduction to the Residence Nil Rate Band, its eligibility criteria, and how it can be used to maximize inheritance tax relief.

What is the Residence Nil Rate Band (RNRB)?

RNRB is an additional tax free allowance which will apply where a person leaves their main residence to their direct descendants on their death. It is separate to the standard Nil Rate Band which applies to all estates.

RNRB was introduced on 6 April 2017 and its current value is £175,000. It is frozen at this value until 5 April 2028.

Similar to the standard NRB, when the RNRB is not used it can be transferred between spouses to be used on the survivor’s death.

RNRB Eligibility Criteria

In its essence, RNRB appears a simple concept, but in its detail there are several criteria that must be met.

1. Ownership of a Qualifying Residential Interest

The deceased must have owned an interest in a property which has been their residence at some point whilst owning the property. This is known as the Qualifying Residential Interest.

The property doesn’t have to be a main home and there is no minimum ownership or residing period.

2. Inherited by Direct Descendants

The property needs to be inherited by direct descendants, or those treated as direct descendants for the purposes of RNRB in S8K Inheritance Tax Axt 1984. This includes but is not limited to the following:

  • A lineal descendant, such as children, grandchildren and great grandchildren
  • A spouse/civil partner of a lineal descendant
  • A deceased lineal descendant’s widow (who has not remarried or formed a new civil partnership)
  • Stepchildren and their lineal descendants
  • A biological child of the deceased, who was adopted by someone else
  • Foster children
  • A person who the deceased is/was guardian or special guardian for
3. Rules on how the property is inherited

There are certain rules on how the property must pass to a beneficiary for RNRB purposes. A person is treated as inheriting the property for RNRB is it passes to them:

  • by Will; or
  • under the Rules of Intestacy; or
  • otherwise disposing of the property

‘Otherwise disposing of the property’ could include post death variations, survivorship under a joint tenancy, or where property is gifted in lifetime but remains part of the deceased’s estate due to a gift with reservation of benefit.

Where a property passes to a trust on death, there will be certain trusts where RNRB will still apply. These are:

  • An immediate post death interest trust where the life tenant of that trust is a direct descendant
  • A disabled persons trust where the disabled beneficiary is a direct descendant
  • A bereaved minor’s trust
  • A bereaved young person’s trusts

Any other trust, such as a discretionary trust, will not qualify, unless that trust ends within two years of death.

Tapering of RNRB

RNRB has a taper threshold, currently valued at £2 million. Where an estate is more than the taper threshold, the amount of RNRB available is reduced by £1 or every £2 that it is over the threshold. This would mean that RNRB is not available for estates over £2,350,000 for a single person or £2,700,000 for a married couple.

Downsizing and RNRB

Where a person downsizes to a lower value property or sells their property and does not buy a new one (for example they move in with family), there are rules in place to ensure that RNRB can instead apply to other assets, but these are complex in their detail.


RNRB provides valuable tax relief to families when passing on their primary residence to direct descendants. By understanding the eligibility criteria and planning ahead, individuals can make the most of this additional threshold and reduce the impact of inheritance tax on their estates.



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Photo by Tierra Mallorca on Unsplash

Chris Rattigan-Smith