Residence Nil Rate Band (RNRB) Calculator
Estimate how much residence nil rate band may be available and your potential inheritance tax exposure.
What is the residence nil rate band?
The residence nil rate band (RNRB) is an extra inheritance tax allowance that may apply when someone leaves a qualifying home to direct descendants (for example children, stepchildren, adopted children, foster children, or grandchildren). It sits on top of the standard nil rate band.
In simple terms, if your estate qualifies, more of it can pass free of inheritance tax before the 40% rate starts applying.
Current headline allowances used in this calculator
- Standard nil rate band: £325,000 per person
- Residence nil rate band: up to £175,000 per person
- Taper threshold for RNRB: £2,000,000 estate value
- Taper rule: RNRB is reduced by £1 for every £2 above £2,000,000
If two full allowance sets are available (commonly on second death in a married/civil partner estate with full transferability), the maximum combined potential can be up to £1,000,000 before taper applies.
How this calculator works
Step 1: Start with standard nil rate band
We apply £325,000 for one allowance set, or £650,000 for two.
Step 2: Estimate provisional RNRB
The calculator starts from up to £175,000 (or £350,000 with two sets), then caps it by the value of the qualifying residence actually passing to direct descendants.
Step 3: Apply taper if the estate exceeds £2 million
If your estate is above £2,000,000, the provisional RNRB is reduced by £1 for every £2 above that threshold.
Step 4: Estimate taxable estate and tax at 40%
Estimated taxable amount = estate value minus total available allowances. Estimated inheritance tax = 40% of that taxable amount.
Worked examples
Example A: Single person, moderate estate
- Estate: £700,000
- Home to children: £250,000
- Allowances: £325,000 + £175,000 = £500,000 (capped by residence value, still £175,000 available)
- Taxable estate: £200,000
- Estimated IHT: £80,000
Example B: Two allowance sets but estate above taper threshold
- Estate: £2,200,000
- Home to descendants: £600,000
- Maximum RNRB before taper: £350,000
- Excess above £2m: £200,000, so taper reduction is £100,000
- Final RNRB: £250,000
- Total allowance: £650,000 + £250,000 = £900,000
Common mistakes people make
- Assuming RNRB applies automatically even when the home is not left to direct descendants.
- Ignoring the taper impact for estates above £2 million.
- Forgetting that RNRB is limited by the value of qualifying residential property in the estate.
- Assuming this is the final tax bill without considering gifts, trusts, reliefs, exemptions, or administration details.
Planning ideas to discuss with a professional
- Will structure and whether the residence passes in a qualifying way.
- Use of transferable nil rate bands between spouses/civil partners.
- Lifetime gifting strategy and 7-year rule implications.
- Potential use of business relief or agricultural relief where relevant.
- Reviewing asset ownership and beneficiary design to avoid accidental loss of RNRB.
Frequently asked questions
Does everyone get the residence nil rate band?
No. Broadly, you need a qualifying residence and it must pass to direct descendants, with the allowance also potentially reduced or eliminated by tapering for larger estates.
Can RNRB be bigger than my home value?
No. The available RNRB is capped by the value of qualifying residential property that is inherited by direct descendants.
Is this calculator a final HMRC calculation?
No. It is an educational estimate. Real-world inheritance tax computations can involve reliefs, exemptions, trust clauses, previous gifts, and more detailed statutory rules.