Residence Nil-Rate Band

The residence nil-rate band (RNRB) is an additional Inheritance Tax-free allowance, on top of the standard nil-rate band, that applies when the deceased's main residence is left to direct descendants (children, including stepchildren and adopted children, grandchildren, and so on). [source: gov-uk/iht-residence-nil-rate-band-2026-04-29.html]

The current allowance is £175,000. Combined with the £325,000 nil-rate band, an individual leaving their home to direct descendants has a £500,000 threshold; a surviving spouse who inherits the partner's unused allowance can stack to £1,000,000. [source: gov-uk/iht-residence-nil-rate-band-2026-04-29.html]

Conditions and edge cases:

• The RNRB tapers down for estates worth more than £2 million, reducing by £1 for every £2 above that threshold.
• The home does not need to be left outright; an interest in possession trust for the descendant qualifies.
• "Direct descendants" excludes nieces, nephews, siblings, and friends; the allowance does not apply to a home left to those beneficiaries.
• A "downsizing addition" preserves the allowance where the deceased sold or moved from a more valuable home before death. [source: gov-uk/iht-residence-nil-rate-band-2026-04-29.html]

The RNRB is reflected in IHT400 (and the supplementary form for the residence allowance) where the estate isn't an excepted estate. → Inheritance Tax

Last verified: 29 April 2026 against gov.uk RNRB guidance.