Residence Nil-Rate Band Calculator UK 2025/26
The Residence Nil-Rate Band gives an extra £175,000 of inheritance tax-free allowance when the family home passes to children or grandchildren. The figure is set at £175,000 from April 2020 and frozen until April 2030.
UK Calculator Editor ·
Residence Nil-Rate Band Calculator UK 2025/26
Eligibility for RNRB
RNRB applies when a 'qualifying residential interest' (the deceased's home) passes on death to a 'direct descendant' (children, grandchildren, including step-, adopted, and fostered). The home must have been a residence at some point during the deceased's ownership — buy-to-lets and holiday cottages don't qualify.
If the deceased downsized before death, the 'downsizing addition' preserves RNRB up to the value of the previous home — provided the eventual estate proceeds also pass to direct descendants.
Taper above £2m estate value
Estates valued at more than £2m lose £1 of RNRB for every £2 above the threshold. By £2,350,000 the £175,000 RNRB is fully tapered away. Combined with the £325k NRB, the total tapered allowance disappears at around £2,675,000.
Strategies for very large estates: lifetime gifts to children outside the 7-year rule, charitable gifts (10% of estate gives 36% IHT rate on remainder), business property relief on qualifying assets, and trusts to manage future tax exposure.
£600,000 single estate, home £400k
RNRB £175k base, no taper (estate <£2m). RNRB used: £175,000. IHT saving: £70,000.
£1.6m couple estate (second death) home £700k
RNRB on second death: £175k own + £175k transferred = £350k. No taper (£1.6m <£2m). RNRB used: £350,000. IHT saving: £140,000.
£2.5m estate with home
Base RNRB £175k. Taper: £500k over £2m / 2 = £250k taper. RNRB reduced to £0. No saving.
Common mistakes to avoid
- Leaving the home to nephew/niece instead of direct descendants — RNRB lost.
- Forgetting that the home must have been a residence at some point — pure investment properties never qualify.
- Missing the downsizing addition when proceeds of an old home are bequeathed.
- Not claiming transferable RNRB on second death — must elect within 2 years.
- Believing RNRB applies to multiple homes — only one qualifying residential interest is allowed.
When to use this calculator
Estate planning, especially before downsizing or major asset sales. Useful when estates approach the £2m taper threshold to plan lifetime giving.
How this differs in Scotland, Wales and Northern Ireland
RNRB is UK-wide. Scotland, Wales and NI all use the same £175,000 RNRB and £2m taper.
Official UK Sources
- gov.uk: passing home to descendants
- gov.uk: RNRB technical
- gov.uk: IHT overview
- gov.uk: transferable NRB
Last reviewed: May 2026 against HMRC 2025/26 rates.
Frequently asked questions
Can RNRB apply to a holiday home?
No — only the family residence.
What if I gifted my home to my children before death?
If the gift was made within 7 years and you continued to live there as 'gift with reservation', the home returns to your estate and RNRB still applies if it goes to descendants.
Does the descendant need to be UK-resident?
No — RNRB applies regardless of beneficiary residence.
Can a couple use £350k RNRB on first death?
No — RNRB is per individual but transferable. On first death the survivor inherits the unused RNRB; on second death they have up to £350k available.
What's the downsizing addition?
If you sold your main home before death and the proceeds (or part of) pass to descendants, RNRB applies up to the value of the original home. Helpful for those who downsize to a smaller flat.
Is RNRB part of probate value?
Yes — RNRB is calculated as part of the IHT computation on the IHT400 form (IHT435 schedule).
Are foster children direct descendants?
Yes — HMRC's definition includes children of the deceased's spouse, adopted, step- and fostered children.
Can RNRB be used against a property in trust?
Generally yes if the trust is an immediate post-death interest in possession or a bare trust for descendants. Discretionary trusts usually don't qualify.
When this calculator is and isn't the right tool
The Residence Nil-Rate Band Calculator UK 2025/26 above is built for the most common UK 2025/26 scenarios in this tax area. It will be the right tool when your situation maps cleanly onto the inputs — single property or simple aggregation, standard HMRC rates and bands, and individual taxpayer (rather than complex trust or partnership structures). It is informational and does not replace tailored advice from a chartered tax adviser, especially for transactions above £500,000, cross-border situations, or where reliefs interact with each other. For year-end filings, always reconcile with HMRC's own free calculators on gov.uk before pressing submit on Self Assessment.
Closely related calculators
- IHT on Property — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
- IHT Calculator (legacy) — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
- CGT on Property — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
- Landlord Tax — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
- Holiday Let CGT — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
Glossary of UK property tax terms
- HMRC
- His Majesty's Revenue and Customs — the UK tax authority.
- Tax year
- 6 April to the following 5 April. 2025/26 means 6 April 2025 to 5 April 2026.
- Marginal rate
- The rate of tax that applies to the next pound of income.
- Self Assessment
- The UK system for individuals reporting income tax outside PAYE.
Tax planning checklist
- Confirm the figures input above match your actual position — purchase contract, mortgage offer or completion statement.
- Cross-check the year (2025/26) — figures change every April. The tax year 2026/27 starts 6 April 2026.
- Use HMRC's official calculator at gov.uk for the final filing figure; this calculator is informational.
- Keep records for at least 6 years — HMRC's normal enquiry window. 21 years for fraud investigations.
- Discuss any unusual transaction (joint purchase, gift, divorce settlement, trust) with a qualified tax adviser.
- Submit your return online via Government Gateway — paper deadlines are earlier and penalties harsher.