Residence Nil-Rate Band Explained: RNRB Guide 2026

What is the Residence Nil-Rate Band?

The residence nil-rate band (RNRB) is an additional inheritance tax allowance worth up to £175,000 that applies when you leave your home to direct descendants such as children, grandchildren, or stepchildren. It works alongside the standard nil-rate band (NRB) of £325,000, potentially giving individuals a combined tax-free allowance of £500,000.

The government introduced the RNRB in April 2017 to help families pass on the family home without facing a large inheritance tax bill. It was phased in gradually, starting at £100,000 and reaching its current level of £175,000 in April 2020. The threshold has been frozen at this level and will remain so until at least April 2030.

Unlike the standard nil-rate band, which applies to any part of your estate, the RNRB specifically relates to your main residence and has additional qualifying conditions.

Current RNRB Thresholds and Allowances

The inheritance tax thresholds have been frozen since 2009 for the NRB and 2020 for the RNRB. Understanding both allowances is essential for estate planning, as they work together to reduce your potential IHT liability.

The "married couple" figures assume full transfer of unused allowances from the first spouse to die. Both the NRB and RNRB can be transferred to a surviving spouse or civil partner, effectively doubling the available allowances. See our married couple case study for a detailed example of how this works in practice.

The freeze on these thresholds means their real value continues to erode with inflation. As property prices and asset values rise, more estates are being pulled into the inheritance tax net each year, making careful planning increasingly important.

Who Qualifies for RNRB?

The RNRB has specific conditions that must be met. Understanding these rules is crucial, as failing to meet even one condition means you cannot claim the allowance.

If you own a residential property

The RNRB applies to an interest in a residential property that has been your residence at some point. This doesn't have to be your current home—it just needs to have been your residence during your ownership. The property must be included in your estate at death, either as the full property or a share of it.

Buy-to-let properties and second homes that you have never lived in do not qualify. However, if you previously lived in a property that you later rented out, it may still qualify as long as it was your residence at some point. For more on how different property types are treated, see our guide to inheritance tax on property.

If you're leaving your home to children or grandchildren

The property (or an equivalent value) must pass to "direct descendants" on your death. Direct descendants include:

• Children (including adopted children and stepchildren)
• Grandchildren and great-grandchildren
• Spouses or civil partners of direct descendants (even if the descendant has died)

Importantly, the property does not qualify for RNRB if you leave it to:

• Siblings, nephews, or nieces
• Parents or grandparents
• Unmarried partners of your children
• Friends or other non-relatives

The property can pass through your will, under intestacy rules, or through certain types of trusts that give direct descendants an immediate interest.

If your estate is worth more than £2 million

The RNRB is subject to a taper for estates valued above £2 million. For every £2 your estate exceeds this threshold, you lose £1 of RNRB. This means:

• Estate of £2 million: full RNRB of £175,000
• Estate of £2.1 million: RNRB reduced to £125,000
• Estate of £2.2 million: RNRB reduced to £75,000
• Estate of £2.35 million or more: RNRB reduced to £0

The taper applies to the total estate value before any exemptions such as the spouse exemption or charity exemption. This can create surprising results for married couples where the first death passes everything to the surviving spouse—the estate may then exceed the taper threshold on second death.

Use our RNRB taper calculator to see exactly how the taper affects your allowance.

If you've downsized or sold your home

What happens if you sell your home or move to a smaller property before death? The government introduced the "downsizing addition" to address this situation.

If you sold or downsized your home on or after 8 July 2015 and would have qualified for RNRB had you kept it, your estate may be able to claim a "downsizing addition." This allows the RNRB to apply to other assets being passed to direct descendants, preserving the benefit even though the original property is no longer in the estate.

The downsizing addition has specific rules about timing and the assets that can qualify. If you're considering selling your home or moving into care, seek professional advice to understand how this affects your estate planning.

Worked Example: Widow with Transferred RNRB

Let's work through a realistic example to show how the RNRB operates in practice.

Try Estate Map's inheritance tax calculator to see how the RNRB and other allowances apply to your own situation.

What's Changing

While the RNRB itself isn't directly changing, several related reforms may affect how much benefit you get from it.

Threshold freeze until April 2030

Both the NRB (£325,000) and RNRB (£175,000) remain frozen until April 2030. With property values and inflation continuing to rise, more estates will exceed the £2 million taper threshold, reducing or eliminating the RNRB benefit for those families.

April 2026: APR and BPR reforms

April 2027: Pensions included in estates

Frequently Asked Questions

Can I claim RNRB if I don't own a home?

Generally, no. The RNRB requires an interest in a residential property that was your residence at some point. However, if you previously owned a qualifying property and sold it after 8 July 2015, the "downsizing addition" may allow your estate to claim an equivalent benefit. This applies the RNRB value to other assets passing to direct descendants.

What counts as a direct descendant for RNRB?

Direct descendants include your children, grandchildren, and subsequent generations. This includes adopted children, stepchildren, and foster children (if you fostered them as a minor). It also includes the spouse or civil partner of a direct descendant, even if the descendant has died. It does not include siblings, nieces, nephews, or unmarried partners of your children.

Can I get RNRB on a second home?

Only if you have lived in it as your residence at some point. Buy-to-let properties and holiday homes that you have never lived in do not qualify for RNRB. If you have lived in multiple properties, you can nominate which one should be treated as the qualifying residence for RNRB purposes.

What happens to RNRB if I give away my home before death?

If you give away your home and survive for seven years, the gift is exempt from inheritance tax under the seven-year rule. However, you cannot then claim RNRB on that property. If you continue living in the property after gifting it, the gift may be treated as a "gift with reservation of benefit" and remain in your estate for IHT purposes.

How does RNRB work with trusts?

RNRB can apply to property held in certain trusts, but the rules are complex. The property must pass to direct descendants through a "qualifying interest in possession" or through a "bereaved minor's trust." Discretionary trusts generally do not qualify for RNRB. If your estate planning involves trusts, take professional advice to understand the RNRB implications.

Next Steps

1. Check if your home qualifies: Review whether your main residence meets the RNRB criteria—you must have lived in it at some point, and it must pass to direct descendants.
2. Calculate your estate value: Include all assets to check whether the £2 million taper threshold applies. Remember that from April 2027, pension values will also count.
3. Use our calculator: Estate Map's free IHT calculator shows your RNRB entitlement and how it affects your overall inheritance tax position.
4. Consider professional advice: For complex estates involving trusts, business assets, or property abroad, a solicitor or tax adviser can help maximise your RNRB claim and overall estate planning.