How to Calculate the Residence Nil-rate Band

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Residence Nil-Rate Band Calculator (UK)

The market value of the property being passed to direct descendants.
Total value of all assets (including the home) minus liabilities.
Current tax year maximum per person.
Enter 0-100% (unused allowance from late spouse).
Maximum Potential Allowance:
Taper Reduction (Estate > £2M):
Residence Cap Limit:
Final RNRB Available:

How to Calculate the Residence Nil-Rate Band

The Residence Nil-Rate Band (RNRB) is an additional Inheritance Tax allowance in the UK, introduced to help individuals pass their family home to direct descendants without incurring excessive tax liabilities. As of the current tax year, the maximum RNRB is £175,000 per person.

Eligibility Criteria

To qualify for the RNRB, two main conditions must be met:

  • The Property Condition: The estate must include a residence that was the deceased's main home at some point.
  • The Direct Descendant Condition: The property must be closely inherited by direct descendants (children, grandchildren, adopted children, foster children, or stepchildren).

The Tapering Threshold

The RNRB is designed for middle-value estates. If the net value of the estate (assets minus liabilities) exceeds £2 million, the RNRB is tapered away. The withdrawal rate is £1 for every £2 that the estate value exceeds the £2 million threshold.

For example, if an estate is worth £2,100,000, the excess is £100,000. The RNRB would be reduced by £50,000.

The Residence Cap

It is important to note that the RNRB cannot exceed the value of the home itself. If your RNRB allowance is £175,000 but the home is only worth £150,000, your specific RNRB claim is capped at £150,000.

Transferable Allowance

Like the standard Nil-Rate Band, the Residence Nil-Rate Band is transferable between spouses and civil partners. If a spouse died and did not use their RNRB (perhaps because they died before it was introduced or left their share of the house to the surviving spouse), the unused percentage can be transferred. This allows a surviving spouse to potentially claim up to £350,000 in RNRB.

function calculateRNRB() { // Get inputs var residenceVal = parseFloat(document.getElementById('residenceValue').value); var estateVal = parseFloat(document.getElementById('estateValue').value); var transferPct = parseFloat(document.getElementById('transferPercent').value); var standardAllowance = 175000; // Fixed for current tax year logic var taperThreshold = 2000000; // Validate inputs if (isNaN(residenceVal) || isNaN(estateVal)) { alert("Please enter valid amounts for the Residence Value and Estate Value."); return; } if (isNaN(transferPct) || transferPct 100) { transferPct = 0; } // 1. Calculate Maximum Potential Allowance (Base + Transferred) var transferAmount = standardAllowance * (transferPct / 100); var maxPotential = standardAllowance + transferAmount; // 2. Calculate Taper Reduction var taperReduction = 0; if (estateVal > taperThreshold) { var excess = estateVal – taperThreshold; taperReduction = excess / 2; } // 3. Apply Taper var adjustedAllowance = maxPotential – taperReduction; if (adjustedAllowance < 0) { adjustedAllowance = 0; } // 4. Apply Residence Cap (Cannot exceed value of the home) var finalRNRB = Math.min(adjustedAllowance, residenceVal); // Formatter for currency var formatter = new Intl.NumberFormat('en-GB', { style: 'currency', currency: 'GBP', minimumFractionDigits: 0, maximumFractionDigits: 0 }); // Display Results document.getElementById('rnrbResult').style.display = 'block'; document.getElementById('displayMaxPotential').innerText = formatter.format(maxPotential); document.getElementById('displayTaper').innerText = "-" + formatter.format(taperReduction); document.getElementById('displayCap').innerText = formatter.format(residenceVal); // Showing the limit imposed by the house value document.getElementById('displayFinal').innerText = formatter.format(finalRNRB); }

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