What is Residence Nil Rate Band (RNRB)?
An additional £175,000 IHT allowance when you leave your home to direct descendants.
Key Facts
- ✓ Additional £175,000 IHT-free allowance
- ✓ Only applies when main home is left to direct descendants
- ✓ Combined with NRB: £500,000 per person tax-free
- ✓ Couples can combine: up to £1 million tax-free
- ✓ Tapers for estates over £2 million (lost completely at £2.35 million)
- ✓ Introduced April 2017
Current Rates (2025/26)
- ▸ RNRB: £175,000
- ▸ Taper starts: £2,000,000 estate value
- ▸ Fully withdrawn: £2,350,000
Explanation
The Residence Nil Rate Band (RNRB) is an additional inheritance tax allowance introduced in April 2017. It provides an extra £175,000 of IHT-free threshold when the deceased's main home is left to direct descendants — children, grandchildren, stepchildren, adopted children, or foster children. Combined with the standard nil rate band of £325,000, the total IHT-free threshold becomes £500,000 per person, or up to £1 million for a married couple. However, the RNRB tapers away for estates worth more than £2 million — it is reduced by £1 for every £2 the estate exceeds £2 million, meaning it is fully lost at estates of £2.35 million. The RNRB was introduced to help families pass on the family home without a large IHT bill, but the taper means wealthier estates may not benefit.
Try the calculator: Use our free calculator to see how residence nil rate band (rnrb) affects your finances.
Inheritance Tax Calculator →Other Glossary Terms
The system HMRC uses to collect income tax and National Insurance directly from employees' wages.
National InsuranceA UK tax on earnings and self-employed profits that funds the state pension, NHS, and benefits.
Personal AllowanceThe amount of income you can earn each year before paying income tax — currently £12,570.
Basic Rate (20%)The 20% income tax rate applied to taxable income between £12,571 and £50,270.
Higher Rate (40%)The 40% income tax rate applied to taxable income between £50,271 and £125,140.
Additional Rate (45%)The 45% income tax rate applied to taxable income above £125,140.