IHT—residence nil rate band


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Private Client expert
Practice notes

IHT—residence nil rate band


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Private Client expert

Practice notes
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This Practice Note introduces the residence nil rate band (RNRB), which was originally known as the additional threshold and is also known as the residential nil rate band or residential property nil rate band. It explains what the RNRB is, the conditions for it to apply, how it is calculated and how it is claimed. While this Practice Note contains some links to worked examples, customers are encouraged to see Practice Note: IHT—residence nil rate band Q&As for extensive links to Q&As and worked examples of how the RNRB applies to various scenarios in practice.

The RNRB is an addition to the basic NRB, which further reduces the Inheritance tax (IHT) payable on death. It is applied to the taxable value of the estate, but differs from the basic NRB in that it is restricted to:

  1. •

    the value of a residential property interest

  2. •

    the estate on death, and

  3. •

    the inheritance of lineal descendants

  4. •

    estates not exceeding the upper taper threshold

The RNRB was introduced in the Finance Act 2015 (FA 2015), with refinements

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Jurisdiction(s):
United Kingdom
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Key definition:
Inheritance tax definition
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Inheritance Tax is paid on an estate when somebody dies or when trusts or gifts are made during someone's lifetime.

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