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- ▸ Fully withdrawn: £2,350,000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 employee 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.
Frequently Asked Questions
What does residence nil rate band (rnrb) mean?
An additional £175,000 IHT allowance when you leave your home to direct descendants.
Why does residence nil rate band (rnrb) matter?
Understanding residence nil rate band (rnrb) helps you make informed financial decisions and ensure you pay the correct amount of tax. Getting it wrong could mean overpaying or underpaying HMRC, which may result in penalties or missed savings. Use our calculators to see how residence nil rate band (rnrb) applies to your personal situation.
Where can I find more information about residence nil rate band (rnrb)?
HMRC publishes official guidance on GOV.UK for all UK tax topics. For a quick overview, our glossary entries are written in plain English and updated each tax year. You can also use our free online calculators to model different scenarios and understand how changes to your income, deductions, or allowances affect your overall tax position.