What is the RNRB?

The RNRB is an additional inheritance tax (IHT) free allowance to be introduced on the 6th April 2017 and is available to use against a property (or assets representing it) that has at some point been occupied as the family home. It could result in £140,000 IHT saving once fully introduced. It is to be phased in over a period of 4 years

Tax Year RNRB
2017-18  £100,000
2018-19 £125,000
2019-20 £150,000
2020-21 £175,000
Onwards  CPI


How will it work?

Here’s an example:

Bob’s Estate Diana’s Estate
House £250,000 £250,000
Other assets £250,000 £250,000
Total £500,000 £500,000


  • Bob dies in December 2018 leaving whole estate to Diana
  • Diana’s estate now consists of £500,000 property and £500,000 of other assets = £1m
  • Diana dies in January 2021 leaving her estate to her children


House                         £500,000
Less Bob’s RNRB      (£175,000)
Less Diana’s RNRB   (£175,000)
Total                            £150,000
Plus other assets      £500,000
Total                            £650,000
Less NRB (Bob)         (£325,000)
Less NRB (Diana)     (£325,000)
Total £0 x 40 % = NO INHERITANCE TAX!

What are the rules?

  1. A qualifying residential interest will be ‘an interest in a dwelling-house which has at any time been the deceased’s residence and which forms part of the deceased’s estate’. Buy to let properties do not qualify.
  2. It is transferable between spouses but there is no requirement for the first of the couple to die to own a qualifying residential interest at the time of their death for unused RNRB to accumulate to the survivor. Where the first death occurred before 6 April 2017, the RNRB at the time of first death is deemed to be £100,000 and regardless of the actual circumstances, no part of this RNRB, will be deemed to have been used on first death
    Exception to this general rule is where the transferable RNRB is reduced/lost due to the taper threshold test
  3. Available where the property (or assets representing it) is closely inherited on the death of the owner by one or more of the deceased’s children, grandchildren or other lineal descendants
  4. Where the deceased’s estate exceeds £2m (the taper threshold), the appropriate RNRB amount will be reduced by £1 for every £2 by which the taper threshold is exceeded to provide an ‘adjusted allowance’