Residence Nil Rate Band (RNRB) Calculator

RNRB Rates & Thresholds 2026/27

Expert Guide: Residence Nil Rate Band 2026

What Is the RNRB?

The Residence Nil Rate Band (RNRB) is an additional Inheritance Tax (IHT) allowance introduced in April 2017, layered on top of the standard £325,000 Nil Rate Band (NRB). It allows homeowners to pass more of their estate to direct descendants free of IHT when a qualifying residential property is included in the estate. The RNRB reached its maximum of £175,000 per person in April 2020 and has been frozen since. Combined with the transferable NRB, a married couple or civil partnership can shelter up to £1 million from IHT — making estate planning for property owners significantly more valuable.

What Counts as a Qualifying Residence?

The property must have been occupied by the deceased as their residence at some point during their lifetime. It does not have to be their main home at the time of death, nor does it need to have been owned at death. The key requirements are:

• The deceased must have lived in the property — rental properties they never occupied do not qualify
• The property must be a residential property (house, flat, bungalow) — commercial property does not count
• Only one residential property can qualify if multiple homes are owned; the executors choose which
• The property must be included in the deceased's estate — jointly owned properties passing by survivorship still qualify

If no qualifying property exists because the person downsized, went into care, or sold their home, the downsizing addition provisions (see below) may preserve some or all of the RNRB.

Direct Descendants: Who Qualifies?

The property (or its proceeds, in the case of downsizing) must be left to direct descendants or their spouses/civil partners. The definition of direct descendant is broader than many expect:

• Children (including stepchildren, adopted children, and foster children)
• Grandchildren and great-grandchildren
• Spouses or civil partners of any of the above (including widowed spouses who have not remarried)

Importantly, nieces, nephews, siblings, and other relatives do not qualify as direct descendants for RNRB purposes. If your estate passes to a trust, it will only qualify if the trust is an immediate post-death interest trust (IPDI) or a disabled persons trust where direct descendants are the beneficiaries.

The Downsizing Addition

Introduced to prevent the RNRB from penalising people who had sold or downsized their home, the downsizing addition ensures the relief is not lost simply because the deceased did not own a qualifying property at death. The rules apply when:

• The deceased disposed of a former home on or after 8 July 2015
• The property sold or given away would have qualified for the RNRB
• The estate includes other assets left to direct descendants

The downsizing addition equals the lesser of: (a) the RNRB that would have been available for the former home, and (b) the value of other assets in the estate left to direct descendants. Executors must actively claim this relief on form IHT435.

RNRB Taper: Estates Over £2 Million

The RNRB (including any transferred RNRB) is progressively withdrawn for larger estates. For every £2 the net estate exceeds £2 million, the RNRB reduces by £1. The calculation uses the net estate value — after liabilities but before reliefs such as APR or BPR. This means:

• An estate of £2.2m loses £100,000 of RNRB (£200,000 excess ÷ 2)
• A single person's RNRB is entirely withdrawn at £2,350,000
• A couple's combined RNRB (£350,000) is entirely withdrawn when the survivor's estate reaches £2,700,000

Planning point: Gifting assets in the 7 years before death can reduce the estate below £2 million and preserve the full RNRB, but this must be balanced against taper relief rules on gifts.

Transferable RNRB from a Deceased Spouse or Civil Partner

Any unused RNRB from a deceased spouse or civil partner can be transferred to the surviving spouse's estate. The transfer uses a percentage approach: if the first spouse's RNRB was 100% unused (e.g. they left everything to the surviving spouse with no residential property left to descendants), the survivor can claim an additional 100% of the RNRB rate in force at the time of their own death — which is £175,000 in 2026/27, regardless of the RNRB rate at the first death.

The transferred RNRB is subject to the same taper rules as the own RNRB. It must be claimed by executors on form IHT435. There is no time limit on making the claim, but it must be made within 2 years of the end of the month of death (or such longer period as HMRC may allow).

Interaction with the Standard Nil Rate Band

The RNRB sits on top of — and is separate from — the standard NRB of £325,000. For a couple making full use of both allowances in 2026/27:

• Survivor's own NRB: £325,000
• Transferred NRB (spouse): £325,000
• Survivor's own RNRB: £175,000
• Transferred RNRB (spouse): £175,000
• Total IHT-free: £1,000,000

This £1 million threshold only applies when all conditions are met: there is a qualifying residential property of sufficient value left to direct descendants, and the estate does not exceed £2 million (or only partially exceeds it). If the property is worth less than £175,000, the RNRB is capped at the property value.

RNRB Frozen Until 2030 — Planning Implications

Both the NRB (£325,000) and RNRB (£175,000) are frozen until at least April 2030. Given average UK house price inflation, more estates will be dragged into the IHT net over time. The Office for Budget Responsibility (OBR) forecasts IHT receipts growing significantly through the late 2020s, partly due to this fiscal drag. Proactive planning options include:

• Making use of annual exemptions (£3,000/year) and seven-year gifts to reduce the estate
• Considering lifetime property gifts, subject to reservation-of-benefit rules
• Pension planning — uncrystallised pension funds sit outside the estate until 2027 (proposed changes will bring them in scope from April 2027)
• Life insurance written in trust to cover anticipated IHT liability
• Reviewing wills to ensure property is directed to direct descendants, not trusts or non-qualifying beneficiaries

Worked Examples