What is Inheritance Tax Residence Nil Rate Band? UK Definition 2026/27
Quick Answer
Additional £175,000 IHT allowance when passing your home to direct descendants.
Definition of Inheritance Tax Residence Nil Rate Band
The Residence Nil Rate Band (RNRB) is an additional Inheritance Tax allowance of £175,000 when you pass your home to direct descendants (children, grandchildren). Combined with the standard £325,000 nil rate band, a single person can pass up to £500,000 tax-free. Married couples can potentially pass £1 million using transferable allowances.
Inheritance Tax Residence Nil Rate Band — Key Facts for 2026/27
| RNRB amount | £175,000 |
| Standard NRB | £325,000 |
| Combined single | £500,000 |
| Combined couple | £1,000,000 |
How Inheritance Tax Residence Nil Rate Band Works — Example
- 1Estate value: £800,000 (including home)
- 2Home passes to children
- 3Nil rate band: £325,000
- 4Residence nil rate band: £175,000
- 5Total allowance: £500,000
- 6Taxable estate: £300,000
- 7IHT at 40%: £120,000
How Inheritance Tax Residence Nil Rate Band Affects Your Tax
The RNRB significantly reduces IHT for families passing homes to children. However, it tapers for estates over £2 million. Careful planning is needed to maximise the relief, especially for larger estates.
Official HMRC Guidance on Inheritance Tax Residence Nil Rate Band
For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.
HMRC: Residence Nil Rate BandFrequently Asked Questions about Inheritance Tax Residence Nil Rate Band
Accuracy Note
This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.