The residence nil-rate band is an extra inheritance tax allowance of up to £175,000 per person, available where a home is passed on death to direct descendants such as children or grandchildren (gov.uk, as at July 2026, subject to change).
It sits on top of the standard £325,000 nil-rate band, and it is the reason a married couple or civil partners can often pass on up to £1,000,000 before inheritance tax. This guide explains how it works, who qualifies, how the £2,000,000 taper reduces it, and how couples combine their allowances. It forms part of our wider estate planning guide, and sits alongside our overview of IHT thresholds and allowances. Figures are current as at July 2026 and are subject to change.
What is the residence nil-rate band?
The residence nil-rate band (RNRB) is an additional tax-free amount that reduces the value of an estate on which inheritance tax is charged, on top of the ordinary nil-rate band. It applies only where a residence the deceased lived in is left to direct descendants (gov.uk, residence nil-rate band, as at July 2026). It was introduced to help families passing on a home, and it is claimed by the people administering the estate.
How much is the residence nil-rate band?
The maximum residence nil-rate band is £175,000 per person, added to the £325,000 nil-rate band, so a single person leaving a qualifying home to descendants can have up to £500,000 free of inheritance tax (gov.uk, as at July 2026, subject to change). The amount is capped at the value of the home passing to descendants, so a home worth less than £175,000 gives a smaller residence band. Inheritance tax on the estate above the available bands is generally charged at 40%, as set out in our guide to Inheritance Tax Explained.
| Allowance or rate | Level (July 2026) |
|---|---|
| Nil-rate band | £325,000 |
| Residence nil-rate band | Up to £175,000 |
| Combined, one person with a home to descendants | Up to £500,000 |
| Combined, a couple with a home to descendants | Up to £1,000,000 |
| Taper threshold | £2,000,000 |
| Standard rate | 40% |
Source: gov.uk/inheritance-tax and gov.uk residence nil-rate band guidance. The nil-rate band, residence nil-rate band and taper threshold are frozen until the end of the 2030-31 tax year (5 April 2031) (gov.uk), as at July 2026, subject to change.
Who qualifies, and who counts as a direct descendant?
The residence nil-rate band applies where a home the person lived in at some point is left to direct descendants under a will, the intestacy rules, or another legal means. Direct descendants include children, grandchildren and other lineal descendants, and this extends to stepchildren, adopted children and fostered children, along with the spouse or civil partner of a descendant (gov.uk, as at July 2026, subject to change).
It does not cover a home left to other relatives such as nephews, nieces, siblings or friends, and it does not apply if the property is left away from descendants, for example into certain trusts. Because the definitions can be detailed, and because the way a will is drafted affects whether the band is available, this is one area many people choose to check with a qualified professional.
- Usually qualifies: a home left to children, grandchildren, great-grandchildren, stepchildren, adopted or fostered children.
- Usually does not qualify: a home left to siblings, nieces, nephews, friends, or where no residence passes to descendants.
The £2 million taper threshold
The residence nil-rate band is reduced for larger estates. Where the estate is worth more than the £2,000,000 taper threshold, the band falls by £1 for every £2 of value above that figure (gov.uk, as at July 2026, subject to change). On this basis a single person's £175,000 band is reduced to nil once an estate reaches £2,350,000, and the same tapering can apply to a transferred band on the second death of a couple.