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0208 221 8282

Professional, Proactive,
Partner-led advice


LONDON: 0208 221 8282
CHELMSFORD: 01245 254780
COLCHESTER: 01206 867551
IPSWICH: 01473 359720


Residential Nil Rate Band

Residential Nil Rate Band

Are you entitled to the Residential Nil Rate Band?

When the Conservative Government pledged to increase the inheritance tax nil rate band to £1 million from 6 April 2017, it seemed to be a move in the right direction, especially bearing in mind the standard nil rate band has been frozen at £325,000 since 6 April 2009.

But when you consider the detail, it is not as straightforward as it seems. Instead of simply increasing the nil rate band to £1 million, there will be an additional relief called the Residential Nil Rate Band (RNRB). The RNRB is intended to provide additional relief against inheritance tax for those who die after 6 April 2017 and where a residence is left directly to children and grandchildren. If the property is left to a trust this may invalidate the claim so if your Wills have a trust arrangement it is recommended that the Wills are reviewed.

The RNRB will be phased in over 4 years on the following basis:

Tax Year £
2017/2018 100,000
2018/2019 125,000
2019/2020 150,000
2020/2021 175,000


As a couple the maximum inheritance tax saving in 2020/2021 because of the application of the RNRB will amount to £140,000.

The emphasis is very much on married couples or civil partners. Unmarried couples must overcome some hurdles to secure the relief, which can create problems of its own.

Those with estates approaching or more than £2million should seek appropriate advice. The RNRB is tapered where the estate exceeds this threshold and it should be noted that the value of the estate for these purposes is taken before the application of exemptions and reliefs, so the value of “IHT free” businesses are included when calculating this.

With effective lifetime planning LB Group can help you devise a strategy to ensure your wealth is preserved for the next generation. Ensuring the availability of the RNRB is just one way that can help achieve this.

Residential Nil Rate Band

LB Group Limited registered in England © 2018 Company Number: 2796741. Associate Directors are not statutory directors of the firm.

Chubb Insurance Company of Europe S. E, Policy Number: 82182733E. Limit of Indemnity £4 million on any one claim.

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