RNRB ‘Closely Inherited’ Condition: Direct Descendants and the Residence Nil Rate Band

Updated: 13 June 2026 • Reading time: 8 min • By WillSafe UK Editorial Team

The residence nil rate band (RNRB) offers up to £175,000 of additional inheritance tax threshold for the family home — but only if the property is “closely inherited” by a direct descendant. This is the most commonly misunderstood RNRB condition, and getting it wrong means the allowance is simply lost. This guide explains who counts as a direct descendant, which types of will trust preserve or destroy the RNRB, and the specific rules for step-children, adopted children, and grandchildren.

The Closely Inherited Condition: The Basic Rule

Section 8H Inheritance Tax Act 1984 provides that the RNRB applies only where a “qualifying residential interest” is “closely inherited” on death. For a property to be closely inherited, it must pass to one or more of:

• A lineal descendant of the deceased (directly or via an immediately qualifying interest in possession trust)
• The spouse or civil partner of a lineal descendant
• The surviving lineal descendants of a lineal descendant who has predeceased

If none of these applies — for instance, the home passes to a sibling, a long-standing friend, or a discretionary trust — the closely inherited condition fails and the RNRB is not available for that estate.

Who Counts as a ‘Lineal Descendant’?

Schedule 1A IHTA 1984 sets out the full definition. Lineal descendantsinclude:

• Children — biological and legally adopted
• Step-children— the child of a current or former spouse or civil partner
• Foster children— a child fostered by the deceased while the deceased was an approved foster parent
• Children taken in under a Special Guardianship Order
• Grandchildren and further descendants of any of the above, including step-grandchildren and adopted grandchildren
• The children, grandchildren etc. of any of the above— so the definition follows the family tree downwards without limit

Who Does NOT Count as a Lineal Descendant?

Regardless of how close the personal or financial relationship, the following do not qualify as lineal descendants for RNRB purposes:

• Siblings (brothers and sisters)
• Nieces and nephews
• Cousins
• Friends, neighbours, or cohabitants who are not spouses or civil partners
• Charities and other organisations
• The deceased’s own parents or grandparents

This means a testator who leaves the family home entirely to a sibling or to a family friend cannot claim the RNRB for that gift, even if the estate is otherwise modest.

RNRB and Will Trusts: The Critical Distinction

How property passes — outright or via a trust — profoundly affects whether the closely inherited condition is met.

Discretionary Trusts: RNRB Usually Lost

If the will places the residential property into a discretionary trust — even a trust whose only potential beneficiaries are the deceased’s children and grandchildren — the RNRB is not available. Discretionary beneficiaries have no qualifying interest in possession: they have only a hope of benefiting. HMRC therefore treats the property as not passing to the descendants at all for RNRB purposes.

This is a particular trap for wills drafted before the RNRB was introduced in 2017. Wills with nil-rate-band discretionary trust clauses, written to use the NRB on first death before transferable NRBs existed, often direct the home (or a share of it) into the discretionary trust — and forfeit the RNRB on first death as a result.

Immediate Post-Death Interest Trusts: RNRB Preserved

An immediate post-death interest (IPDI) trust — where the trust gives a beneficiary an immediate and qualifying interest in possession — does preserve the RNRB, provided the life tenant is a lineal descendant (or the spouse of a lineal descendant). Under an IPDI, the life tenant is treated as beneficially entitled to the underlying property, so the property is treated as passing directly to that person.

The most common IPDI trust in wills is a life interest for the surviving spouse. This does not satisfy “closely inherited” in the sense that a spouse is not a lineal descendant, but the RNRB is handled differently in that situation: the deceased’s unused RNRB is transferred to the surviving spouse and claimed on the survivor’s death (when the property does pass to the lineal descendants).

Bare Trusts for Minors: RNRB Preserved

A bare trust for a minor lineal descendant preserves the RNRB. Under a bare trust, the child is absolutely entitled to the property; the trustee holds it on the child’s behalf until the child reaches 18. Because the child has a beneficial interest, the property is treated as passing directly to the descendant.

Practical Planning: Preserving the RNRB in Your Will

Given the complexity of the closely inherited rules, the following planning points are worth considering when reviewing or writing a will:

1. Review old nil-rate-band discretionary trust wills. If your will was drafted before 2017 and contains a nil-rate-band discretionary trust clause directing the home into trust on first death, consider updating it. A mirror will leaving the home outright to the surviving spouse, or via an IPDI, will generally preserve the RNRB better.
2. Check step-child status is documented. While step-children legally qualify, HMRC may request evidence of the relationship. Retain evidence of the marriage or civil partnership that created the step-relationship.
3. Consider generation-skipping for IHT efficiency.Leaving the home directly to grandchildren rather than children can save IHT in the grandchildren’s estates, while still satisfying the closely inherited condition. Take advice on the overall planning implications.
4. Check the £2m taper threshold.The RNRB is tapered away at £1 for every £2 by which the net estate exceeds £2m. For larger estates, sophisticated planning (including lifetime gifting) may be needed to keep the estate below £2m and preserve the full RNRB.
5. Downsizing addition. If the deceased sold or downsized from a larger property, the downsizing addition may preserve some or all of the RNRB even if the current home is less valuable — but only if the downsizing proceeds were left to a lineal descendant.

Transferable RNRB on Second Death

Where a deceased person’s RNRB was wholly or partly unused on their death (for example, because the home passed to the surviving spouse rather than directly to descendants), the unused RNRB can be transferred to the surviving spouse or civil partner and claimed on their death — provided that on the survivor’s death the property (or its proceeds under the downsizing rules) passes to lineal descendants. The transfer claim is made using HMRC forms IHT435 and IHT436.

On second death, the closely inherited condition must still be satisfied. If the surviving spouse’s will leaves the home to a discretionary trust rather than outright to descendants, the transferred RNRB will equally be lost — not just the survivor’s own RNRB but also the deceased first spouse’s transferred RNRB.

Frequently Asked Questions