On 6 April 2017 the Government introduced the Residential Nil Rate Band (RNRB) to Inheritance Tax legislation, a new IHT allowance relating to property ownership, which will sit alongside the Nil Rate Band (NRB) which has been available since 2007.

According to the Gov.uk website this new allowance will be phased in from 2017 to 2020, as follows:

  • £100,000 in 2017 to 2018
  • £125,000 in 2018 to 2019
  • £150,000 in 2019 to 2020
  • £175,000 in 2020 to 2021

After 2021 the RNRB will increase in line with inflation (based on the Consumer Prices Index).


An estate will be entitled to the RNRB if the:

  • Individual dies on or after 6 April 2017
  • Individual owns a home, or a share of one, and it’s included in their estate
  • Individual’s direct descendants such as children or grandchildren inherit the home, or a share of it
  • Value of the estate is not more than £2 million

It will be transferable between spouses and civil partners on death (even if the first of the couple died before 6 April 2017) and will also be available to some extent if a parent has to sell their own home to downsize or to meet residential care costs, provided that an equivalent value of the main residence is passed to a direct descendant.

If the property value does not equal or exceed the amount of RNRB available, then the unused sum cannot be applied against the value of other assets in the estate, and, as above, if the value of your estate exceeds £2 million the RNRB will be reduced by £1 for every £2 that you have above this limit.

The introduction of this new allowance may mean that you need to revisit your Will to ensure you comply with the requirement for the property to be left to a direct descendant. For example, if you have left your residuary estate in a Discretionary Trust it is possible that this new amount may not be claimable, even if the class of beneficiaries in the Trust includes your children and / or grandchildren.