Residential Nil Rate Band (RNRB) Calculator
*This is in addition to the standard Nil Rate Band of £325,000 per person.
What is the Residential Nil Rate Band (RNRB)?
The Residential Nil Rate Band is an additional inheritance tax (IHT) threshold available in the UK. It was introduced to help individuals pass on their family home to their direct descendants without incurring heavy tax burdens. As of the 2024/2025 tax year, the maximum RNRB is £175,000 per person.
How Tapering Works
The RNRB is subject to "tapering" if the total value of your estate exceeds £2 million. For every £2 your estate is worth over this threshold, the RNRB allowance is reduced by £1. This means that for a single person, the RNRB is completely lost if the estate is worth £2.35 million or more. For a couple with two allowances (£350,000 combined), the taper wipes out the allowance at £2.7 million.
Who Are "Direct Descendants"?
To qualify for the RNRB, the property must be left to direct descendants, which include:
- Children (including step-children, adopted, and foster children)
- Grandchildren and further lineal descendants
- Spouses or civil partners of direct descendants
Example Calculation
If an estate is valued at £2,100,000 and the property being passed to children is worth £400,000:
- Max Allowance: £175,000
- Taper Calculation: £100,000 over the limit / 2 = £50,000 reduction.
- Adjusted Allowance: £125,000.
- Final Result: The estate gets an extra £125,000 tax-free on top of the standard £325,000 Nil Rate Band.