Residence Nil Rate Band UK (2026): How It Works, Who Qualifies & How to Claim
Updated 13 May 2026 · 10 min read · England & Wales
Quick answer
The residence nil-rate band (RNRB) is an additional £175,000 inheritance tax allowance that applies when you leave your main home (or downsizing proceeds) to direct descendants in your will. Combined with the standard £325,000 nil-rate band, an individual can pass up to £500,000 free of IHT — and a couple up to £1,000,000. The RNRB is not automatic: executors must claim it using HMRC form IHT435. Leaving the home to a discretionary trust forfeits it entirely.
| RNRB fact | Detail |
|---|---|
| Amount (2026/27) | £175,000 per person |
| Frozen until | April 2031 |
| Combined with standard NRB | £500,000 per person / £1,000,000 per couple |
| Taper threshold | Reduces by £1 for every £2 over £2,000,000 |
| Fully tapered at | £2,350,000 net estate (per person) |
| How to claim | HMRC form IHT435 (not automatic) |
| Applies to trusts? | Bare trust: yes. Discretionary trust: NO. Life interest trust: yes. |
What is the residence nil-rate band?
The residence nil-rate band was introduced in April 2017 as an additional IHT allowance specifically for people who leave their main home to their children or grandchildren. It supplements the standard nil-rate band (£325,000) which applies to all estates regardless of what assets they contain.
The RNRB was introduced because rapidly rising property prices — particularly in the South East — were dragging ordinary family homes into IHT liability, despite the policy intention that IHT should only apply to the genuinely wealthy. By ring-fencing an extra £175,000 allowance for the family home, the government aimed to let most homeowners pass their house to their children tax-free.
Three eligibility conditions
All three must be met for the RNRB to apply:
- The deceased must have owned a qualifying residential interest. A qualifying residential interest is a property that the deceased owned and lived in at some point. It does not have to be their main residence at death — a former home they moved out of can qualify, as can a home they owned when they moved into a care home. It does not cover investment properties they never lived in.
- The property (or assets derived from it) must pass to direct descendants. The will must specifically direct the property to qualifying direct descendants. If the residuary estate passes to direct descendants and the property is included in that, it qualifies. The property must not pass to a discretionary trust (see below).
- The net estate must be below the taper threshold (£2,000,000) for full relief. Above this figure, the RNRB reduces by £1 for every £2 of excess estate value.
Who counts as a direct descendant?
The definition is broader than most people expect — but it still excludes common relatives people might assume would qualify:
Qualifies as direct descendant
- ✓ Biological children
- ✓ Adopted children
- ✓ Step-children (where the deceased was married to or a civil partner of a parent)
- ✓ Foster children
- ✓ Grandchildren and great-grandchildren
- ✓ Spouses and civil partners of the above
Does NOT qualify
- ✗ Brothers and sisters
- ✗ Nieces and nephews
- ✗ Cousins
- ✗ Parents or grandparents
- ✗ Unmarried partners
- ✗ Friends or charities
The discretionary trust trap — critical warning
Many wills written before 2017 include “nil-rate band discretionary trusts” over the family home — a tax-planning technique that was popular before the RNRB existed. These trusts now cause significant IHT problems because leaving property to a discretionary trust forfeits the RNRB entirely, even if the only potential beneficiaries of the trust are your children.
For a couple both using these old-style trusts, this could cost £350,000 in lost allowances — at 40% IHT, a tax cost of £140,000.
If your will includes any trust over your property, have it reviewed by a solicitor or check whether it meets the RNRB conditions. A life interest trust is the standard modern alternative: the surviving spouse has a life interest (the right to live in or receive income from the property), with the property passing to direct descendants on the survivor’s death — this structure does qualify for the RNRB.
The downsizing addition
The RNRB is not lost if you downsize or sell your home before death — provided the proceeds (or equivalent value from the estate) pass to direct descendants. The rules are:
- You must have sold or downsized after 8 July 2015.
- You must no longer own a qualifying residential property at death (or own one with a lower value).
- Assets of equivalent value must pass to direct descendants from your estate.
This is particularly important for people who moved into a care home or residential facility before death and sold their home. They can still claim the RNRB against other estate assets that pass to their children. The executor must claim the downsizing addition separately using form IHT436.
Transferring the RNRB between spouses
When the first spouse dies and does not use all of their RNRB, the unused percentage is transferred to the surviving spouse’s estate. For example, if the first spouse left their estate entirely to the surviving spouse (using the spouse exemption), they would have used none of their RNRB — so 100% transfers to the survivor, effectively doubling their available RNRB to £350,000 in 2026/27.
This transfer is available regardless of when the first spouse died — even if they died before the RNRB was introduced in April 2017. The executor of the surviving spouse’s estate must claim it using HMRC form IHT435. It will not be applied automatically.
What your will must say to preserve the RNRB
RNRB will-drafting checklist
- ✓Leave the property specifically to direct descendants — children, step-children, or grandchildren
- ✓Do NOT leave the property into a discretionary trust (even for children)
- ✓If using a trust for a surviving spouse, use a life interest trust — not a discretionary trust
- ✓Tell your executor about the RNRB and the IHT435 claim requirement
- ✓Review your will if it was drafted before April 2017 — it almost certainly does not account for the RNRB
- ✓If you have downsized, check whether your will preserves the downsizing addition by directing equivalent assets to direct descendants
Frequently asked questions
What is the residence nil rate band in the UK?+
The residence nil-rate band (RNRB) is an additional inheritance tax allowance introduced in 2017 and currently set at £175,000 per person (2026/27). It applies when a qualifying residential property is left to direct descendants in a will. It sits on top of the standard nil-rate band of £325,000, giving individuals a combined allowance of £500,000, and couples up to £1,000,000 when both allowances are combined.
Who counts as a direct descendant for the residence nil rate band UK?+
Direct descendants for RNRB purposes include: biological children, adopted children, step-children (where the deceased was married to or in a civil partnership with a parent of the child), foster children, and their own lineal descendants (grandchildren, great-grandchildren). The spouse or civil partner of a direct descendant also qualifies as a beneficiary. It does NOT include siblings, nieces, nephews, cousins, or parents — only those in a direct downward line from the deceased.
What is the RNRB taper and when does it apply?+
The RNRB tapers away for larger estates. For every £2 by which the net estate exceeds £2,000,000, the RNRB reduces by £1. At a net estate value of £2,350,000 (or £2,700,000 for couples), the full RNRB is eliminated. The taper is applied to the net estate value — after deducting liabilities like mortgages and funeral expenses — but before deducting the RNRB itself.
Does the RNRB apply if the home is left to a trust UK?+
Only conditionally. Leaving the property to a discretionary trust forfeits the RNRB entirely — even if all the trust's potential beneficiaries are direct descendants. Leaving the property to a bare (absolute) trust for direct descendants does preserve the RNRB. A life interest trust that gives the surviving spouse a life interest with the remainder to direct descendants also qualifies for the RNRB. This is a critical distinction when drafting a will.
Can you claim the RNRB if you have sold or downsized your home UK?+
Yes — the downsizing addition rules allow you to claim the RNRB even if you no longer own a qualifying property at death, provided you sold or downsized after 8 July 2015 and assets of equivalent value (at least equal to the lost RNRB) pass to direct descendants from your estate. This prevents people from being penalised for moving into a care home, sheltered accommodation, or a smaller property. The executor must make the claim using HMRC form IHT436.
How do you transfer the RNRB between spouses UK?+
When the first spouse dies and does not use (or only partially uses) their RNRB, the unused proportion is preserved and transferred to the survivor's estate. Unlike the standard NRB transfer, the transferable RNRB is expressed as a percentage: if the first spouse used none of their RNRB, 100% is transferred. The executor of the surviving spouse's estate must claim the transferable RNRB using form IHT435 — it is not applied automatically by HMRC, regardless of when the first spouse died.
Is the residence nil rate band going up after 2026 UK?+
No. Both the standard nil-rate band (£325,000) and the residence nil-rate band (£175,000) are frozen at their current levels until April 2031 under the 2025 Autumn Budget. This freeze means that as property values rise with inflation, more estates will be pulled above the threshold — a stealth increase in the effective IHT burden. After April 2031, the bands are expected to increase in line with CPI inflation, but no specific figures have been confirmed.
Claim the RNRB — start with the right will
The RNRB only works if your will directs your home (or downsizing proceeds) correctly to direct descendants. A WillSafe UK will kit includes plain-English guidance on leaving property to your children and the key provisions needed to preserve your £175,000 allowance.