We explain the RNRB and why it matters.
From 6 April 2017 an extra Inheritance Tax allowance called the RNRB helps when a home is left to direct descendants. We will walk you through what it is and how it can reduce tax on a family home.
This guide sets clear expectations. The RNRB is not automatic and has qualifying conditions. Large estates can see the allowance reduced, so planning and good records are vital.
We show how passing unused residence nil rate band to children uk often works via a surviving spouse or civil partner, then a claim on the second death under HMRC guidance. You will learn the core building blocks: qualifying home, direct descendants, and how an unused percentage transfers rather than a sum.
We use plain English and real-style examples. That will make the figures easier to follow and show practical steps for wills, ownership and executor claims.
Key Takeaways
- RNRB is an extra allowance for a family home left to direct descendants.
- The allowance is conditional and can be reduced for larger estates.
- A surviving spouse or civil partner can transfer the unused percentage on second death.
- Correct wills, ownership records and evidence make claims smoother.
- Avoid common pitfalls like unsuitable trusts or assuming transfers for unmarried partners.
Understanding the Residence Nil-Rate Band in the UK inheritance tax system
The RNRB changed estate planning from April 2017. We explain how it sits alongside the standard nil rate band and why that matters for family homes.
How the two allowances differ
- Standard nil rate band — currently £325,000 and applies to most estates as the basic allowance.
- RNRB — an extra allowance that only applies when a qualifying home is left to direct descendants.
Key tax year amounts
The RNRB began on 6 April 2017 and phased in as £100,000 (2017/18), £125,000 (2018/19), £150,000 (2019/20) and £175,000 from 2020/21. That £175,000 figure is frozen until April 2028.
“RNRB available is an extra allowance against the estate, not a separate relief that clings to the property.”
Remember: the extra relief is capped by the net value of the qualifying home after mortgages or charges. In practice, secured debts can reduce the usable allowance even where the house value looks strong. We will cover tapering for estates over £2 million and other complications later.
Who can benefit from transferring unused RNRB between spouses and civil partners
Married and civil partners have a valuable option: the second estate may inherit an uplift from the first death’s unused RNRB.
What a transferred surviving spouse means in practice
Transferred surviving spouse describes the survivor’s estate claiming an increase based on what the first estate did not use.
In everyday terms, the claim lifts the survivor’s allowance when they die. Executors make the claim on the second death and include evidence of the earlier estate.
When transfer works if the first death was before april 2017
Good news: a first death before april 2017 generally still allows a full transfer of the percentage. HMRC guidance usually treats the first estate as having 100% available unless the estate exceeded the £2 million threshold.
Why unmarried partners and divorced couples cannot transfer
Only a surviving spouse or civil partner can claim this uplift. Long-term partners who never married, and ex-spouses, cannot transfer. That makes planning essential where couples cohabit.
- Practical step: keep marriage or civil partnership evidence and estate values ready.
- Note: the £2 million threshold can reduce what transfers from the first estate.
What counts as a qualifying residential interest for RNRB
Not every property will qualify. A qualifying residential interest is a dwelling (or share of one) that the deceased owned and actually lived in at some point. It is not enough to own an investment or let a flat out as a buy-to-let.
How HMRC checks genuine occupation
HMRC expect clear signs of real living there. Short visits or paper addresses rarely meet the test.
Keep bills, council tax, and tenancy or purchase documents as proof. These help executors show the personal link between the owner and the home.
More than one home and nomination
If the estate includes several qualifying residential properties, personal representatives must nominate one property for the relief. You cannot split the allowance across more than one house.
Exclusions and debts
Buy-to-let and pure investment properties do not qualify. Also remember mortgages, equity release and other charges reduce the net value of the dwelling. That lower net value limits the usable relief against the estate worth.
“Clear records make claiming straightforward for executors.”
- Keep purchase and occupancy evidence.
- Make a simple note of which property you treated as your main home.
- Record outstanding mortgages and charges.
Leaving a home to direct descendants: the “closely inherited” requirement
A crucial test for the RNRB is whether the dwelling is “closely inherited” by direct heirs. In plain terms, the qualifying residential interest must end up with your direct descendants rather than elsewhere in the family.
Who counts as direct descendants? This includes children, grandchildren, adopted, step and foster offspring. These people meet the closely inherited test for the rnrb when they receive the home as an inheritance.
Who does not qualify? Nieces, nephews, siblings and friends fall outside the definition. That common error can cost an estate significant relief.
- Gifts made by will, intestacy, survivorship of joint ownership, or a deed of variation can satisfy the test.
- A deed of variation (IHTA 1984 s142) can re-route an inheritance after a death so the house is closely inherited, if done properly.
Remember: even where the first death used no rnrb, the second estate must still meet the closely inherited condition for the survivor’s allowance. We recommend checking plans early and discussing options with an adviser or using our guide on how to transfer the allowance for spouses: transfer guidance for spouses.
passing unused residence nil rate band to children uk: how the transfer works on the second death
Executors should remember that what transfers after the first death is a proportion, not a fixed sum. HMRC allows a surviving spouse or civil partner to claim a transferred percentage when they die. The claim is made on the second death and must be supported by the first estate’s paperwork.
How the calculation works: HMRC first records the percentage of the RNRB that was left unused after the first death. That percentage is then applied to the maximum RNRB in force at the survivor’s date of death. This is why a 100% transfer from a pre-2017 death can be worth more later, when the allowance rose.
Practical point: the survivor still needs to include a qualifying home in their estate and leave it to direct descendants for the uplift to apply. If the property goes to non-qualifying beneficiaries or into certain trusts, the transferred benefit will not produce a tax saving.
- Claim the transferable rnrb on the second death, not earlier.
- Transferred percentages and the survivor’s own rnrb combine, subject to the tax year ceiling at date of death.
- Standard nil rate band transfer is calculated separately from transferable rnrb.
For more on related planning where a single person faces inheritance tax, see our guide on navigating inheritance tax as a single.
How to calculate unused and transferable RNRB with worked examples
We show a clear, two-step approach that executors and families can follow when working out any transferable RNRB. The method mirrors HMRC’s process and helps you see how percentages become cash amounts at the second death.
HMRC’s step-by-step method
Step 1: work out the percentage of the RNRB that remained unused at the first death.
Step 2: apply that percentage to the maximum RNRB available at the date of the survivor’s death. That gives the transferable RNRB amount.
Worked examples
Pre‑April 2017 first death — where the first death happened before 6 April 2017 HMRC treat the earlier available RNRB as fully available. The unused percentage is therefore 100%, and the survivor can apply 100% of the later maximum allowance at their date of death.
Partial use example (George and Marjorie) — George died August 2017. His estate used £75,000 of the initial £100,000 allowance by leaving a share of the home to his son. That leaves 25% available. When Marjorie dies in May 2021 the 25% is applied to the £175,000 maximum, giving a transferable amount of £43,750.
Taper example (Jeff and Jenny) — Jeff’s estate was £2.1m in 2018/19. The RNRB for that year was £125,000 but tapered by £50,000 because the estate exceeded the £2m threshold. That left £75,000 available, so 60% of the full allowance remained. That 60% is the percentage that Jenny can apply at her later date of death.
| Scenario | Date of first death | RNRB at first death | Unused % | Max RNRB at second death | Transferable amount |
|---|---|---|---|---|---|
| Pre‑2017 full transfer | Mar 2016 | £100,000 (deemed) | 100% | £175,000 (2021) | £175,000 |
| George → Marjorie | Aug 2017 | £100,000 | 25% | £175,000 (2021) | £43,750 |
| Jeff → Jenny (taper) | 2018/19 | £125,000 | 60% | £175,000 (2023) | £105,000 |
Why percentages matter: the same unused percentage can translate into very different cash amounts depending on the tax year ceiling at the survivor’s date of death. The home value and the estate worth also shape whether the property cap or the taper threshold limits the relief.
Quick checklist
- Date of each death
- Estate worth at each death
- Home value after charges
- Who inherited the home
Large estates and the £2 million taper threshold: protecting RNRB where possible
A key trap for bigger estates is the taper test, which reduces the available RN R B above a monetary limit.
How the taper works. Once an estate exceeds £2,000,000, the RN R B reduces by £1 for every £2 the estate is over that threshold.
This means a single maximum allowance can drop to zero at roughly £2.35m for the current £175,000 figure. The calculation is simple, but the effect can be large.
What counts as estate worth for the taper
For the taper test we measure the gross estate. Certain reliefs and exemptions are ignored when working out estate worth.
That matters: agricultural and business reliefs do not reduce the figure for taper calculations. Executors should check which reliefs are excluded before assuming the allowance remains fully available.
Lifetime gifts and planning pointers
Gifts made in life are not included in the taper test even if they affect IHT under other rules. That makes careful gifting a possible planning tool.
Couples should avoid simply shifting assets into the survivor’s name if that action risks pushing the second estate above the threshold.
- Consider splitting ownership or spreading gifts over years.
- Review life cover and beneficiary arrangements with an adviser.
- Plan early — late moves rarely help and can backfire.
| Issue | Effect on RN R B | Practical step |
|---|---|---|
| Estate under £2m | Full RN R B available | Record values and keep evidence |
| Estate £2m–£2.35m | Partial reduction by taper | Model scenarios with adviser |
| Estate over £2.35m | RN R B may be eliminated | Consider long-term gifting and trusts |
Downsizing rules and selling the home: keeping RNRB available after 8 July 2015
We explain how selling or giving up a main house can still preserve the rnrb for heirs. The rules stop families being penalised when a move is sensible — for care, lower costs or equity release.
When the downsizing addition can apply
The key date is 8 July 2015. If the home was sold or gifted on or after that date, the executor may claim a downsizing addition.
That only works where the person dies on or after 6 April 2017 and leaves a qualifying property or other assets to direct descendants.
Records that make a claim straightforward
Keep simple but clear evidence. Executors will usually need:
- completion statements and sale contracts
- valuations at sale and at date of death
- proof of who lived at the property and when
- records showing what assets were left for descendants
“Clear paperwork turns a slow, stressful claim into a routine step for executors.”
How the claim is made. The downsizing addition is claimed in the same way as a transferred rnrb. Executors supply the sale and death information and show the equivalent amount left to heirs. For detailed official steps see our downsizing guidance.
| Issue | What to keep | Why it matters |
|---|---|---|
| Sale after 8 July 2015 | Completion statement | Proves the disposal date |
| Valuation | Market value at sale and date of death | Shows net amount used for claim |
| Gifts or replacements | Deeds and wills | Evidence that direct descendants received assets |
Wills, trusts and RNRB: when home gifts qualify and when they fail
Wills and trust clauses can decide whether a family home keeps a valuable allowance. We often find older wills put property into discretionary trusts that block the relief.
The trust trap is simple: a discretionary will trust usually prevents the rnrb applying, even when the intended beneficiaries are direct descendants.
Some trusts do qualify. Examples are immediate post‑death interest trusts, bereaved minor trusts and disabled person’s trusts. HMRC treats these as a qualifying residential interest for a closely inherited gift.
Using a two‑year appointment
A trustee appointment made within two years can be “read back” under IHTA 1984 s144. That can allow the home to be treated as closely inherited for inheritance tax purposes.
Review older wills
Check clauses about occupation rights, who can appoint trustees, and the wording that creates discretionary powers. Small drafting changes often save an estate a significant sum.
“Trusts protect assets, but wording decides if the rnrb survives.”
Practical step: seek advice before changing wills. Thoughtful drafting keeps protection and preserves the allowance for your descendants.
Claiming transferred RNRB: deadlines, forms and evidence personal representatives need
We explain the practical steps executors follow when claiming a transferable RNRB for a surviving spouse or civil partner. The claim sits within the estate’s Inheritance Tax return and needs clear supporting papers.
Time limits and key dates
Main deadline: make the claim within two years from the end of the month in which the second death occurred.
Note: some guidance allows an alternative three‑month limit from when personal representatives start acting. Start early to avoid stress.
What to include in the IHT return
- Certified death certificates and the dates of each death.
- Marriage or civil partnership evidence and any previous probate papers.
- Wills, schedules of assets, and valuations showing the home was in the estate.
- Proof the property was left to direct descendants and any earlier estate valuations for the first date of death.
More than one spouse or civil partner
Where someone had multiple spouses or civil partners over the years, HMRC caps the total transferable amount at 100% of the maximum available. Executors should not assume amounts stack beyond a full allowance.
“Good records now save weeks of chasing later — collect the basics and file them with the IHT return.”
For further detail on rules between spouses, see our guide on the nil-rate band transfer between spouses.
Conclusion
One clear theme ties the rules together: the house must form part of the estate and be left to direct descendants for the RNRB to help at the relevant death.
We recommend couples check wills and ownership now. A surviving spouse can claim a transferred percentage, but the claim only works if the second estate still meets the qualifying tests.
Watch three pressure points: the £2m taper threshold, the net home value cap after mortgages, and discretionary trust wording that can block relief.
Collect key papers and keep them in one folder for executors. With simple planning, many British families can protect their home and reduce inheritance tax uncertainty.