Residence nil rate band

Inheritance Tax allowance for passing on your home

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The residence nil rate band lets you pass on the family home when you die, while potentially reducing an Inheritance Tax bill. The allowance is added to the regular nil rate band but can only be used to pass on property. This free guide tells you more about the rules and exceptions for the allowance.

How much is the residence nil rate band?

The residence nil rate band was introduced in April 2017. It is a £125,000 allowance for passing on the family home to direct descendants, increasing to £175,000 over the next two years. The allowance reduces for larger estates.

How can you pass on your home?

The allowance only applies when you pass the home on to direct descendants. The home doesn’t have to be passed on directly, it can also be left in certain trusts. However, this doesn’t include discretionary trusts – download your free guide to find out how this could affect you.

Which properties are covered by the allowance?

The allowance can be used to pass on one residential property from your estate. The rules are different for properties that you have never lived in, such as buy-to-let properties.

Book a free consultation with a financial planner

You can book a free consultation with our financial planners at your home, local Tilney office or over the phone. They will tell you more about the residence nil rate band and how much Inheritance Tax could be charged when you pass on your home. They can also help you to make financial gifts, pass on your assets tax-efficiently or manage an Inheritance Tax bill.

Book a consultation