Key takeaways
- The residence nil-rate band (RNRB) adds up to £175,000 to the Inheritance Tax threshold when a home is left to direct descendants.
- It is reduced by £1 for every £2 the estate exceeds £2 million, so it disappears at £2.35 million for one person.
- Unused RNRB can be transferred to a surviving spouse or civil partner, giving a couple up to £350,000.
- If you downsized or sold your home after 8 July 2015, the downsizing addition can preserve the relief.
- The RNRB is frozen at £175,000 until April 2031.
The residence nil-rate band (RNRB), sometimes called the main residence allowance, was introduced in 2017 to let families pass on the family home with less Inheritance Tax. It sits on top of the standard £325,000 nil-rate band, but only in specific circumstances, and it is lost for larger estates.
The basics
| 2026/27 | |
|---|---|
| Maximum RNRB per person | £175,000 |
| Maximum for a couple (with transfer) | £350,000 |
| Taper threshold | £2 million (net estate value) |
| Reduction above the threshold | £1 for every £2 over £2 million |
The RNRB is the lower of £175,000 (plus any transferred amount) and the value of the home passing to direct descendants.
Conditions
A qualifying residential interest
The estate must include a home, or a share in a home, that the person lived in at some point. It does not have to have been their main residence for any minimum period, and a former home that is now let can qualify if they lived there once. Buy-to-let properties they never lived in do not qualify.
Closely inherited by direct descendants
The home, or its value, must pass to direct descendants:
- children, grandchildren and great-grandchildren
- stepchildren, adopted children and foster children
- the spouses or civil partners of any of these, including widowed spouses
Nephews, nieces, siblings and friends are not direct descendants. Leaving the home into most discretionary trusts does not qualify, although some trusts for children and bereaved minors do.
The £2 million taper
If the net value of the estate (after debts but before reliefs and exemptions) is over £2 million, the RNRB is reduced by £1 for every £2 over the threshold.
| Net estate | RNRB available (single person) |
|---|---|
| £2,000,000 or less | £175,000 |
| £2,100,000 | £125,000 |
| £2,200,000 | £75,000 |
| £2,350,000 or more | Nil |
Lifetime gifts are not included in the estate for the taper test, which can make gifts during life useful for estates just above £2 million.
Transferring unused RNRB
If the first spouse or civil partner to die did not use all their RNRB, for example because everything went to the survivor, the unused percentage can be transferred to the survivor’s estate, even if the first death was before the RNRB was introduced in 2017. Claims are made on form IHT436 by the executors of the second estate.
Example
Alan and Sue are married with two children. Alan dies first and leaves everything to Sue. Sue dies in 2026 leaving an estate of £1,000,000, including the family home worth £500,000, to the children.
| Amount | |
|---|---|
| Sue’s estate | £1,000,000 |
| Nil-rate bands (2 × £325,000) | (£650,000) |
| Residence nil-rate bands (2 × £175,000) | (£350,000) |
| Taxable estate | £0 |
Without the RNRB, £350,000 would have been taxable at 40%: £140,000.
Downsizing
If someone sells their home or moves to a smaller one on or after 8 July 2015, they can still get the RNRB they would have had, through the downsizing addition, as long as:
- the home sold would have qualified
- they leave a smaller home or other assets of equivalent value to direct descendants
This helps people who move into care or sell up to release money.
Common pitfalls
- Will wording: leaving the home into a discretionary trust, or to nephews and nieces, can lose the RNRB.
- Estates over £2 million: the taper can remove the relief entirely, including the transferred amount.
- Gifted homes: a home given away during life is not part of the estate, unless the gift was a gift with reservation.
- Business owners: business property counts towards the £2 million taper even if it gets Business Property Relief.
Frequently asked questions
Who counts as a direct descendant for the residence nil-rate band?
Children, grandchildren and further descendants, including stepchildren, adopted and foster children, and their spouses or civil partners.
What is the residence nil-rate band for 2026/27?
Up to £175,000 per person, frozen until April 2031, reduced for estates over £2 million.
Can I get the residence nil-rate band if I sold my house?
Possibly, through the downsizing addition, if you sold or downsized on or after 8 July 2015 and leave other assets to direct descendants.
Does the residence nil-rate band apply to a buy-to-let property?
Only if you lived in it at some point. A property that was never your residence does not qualify.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance in October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.