Residential nil rate band (RNRB) meaning

In this issue: Probate UK taxes for Private Client Budgets and Finance Bills HMRC Manuals updates International Question of the week Additional Private Client updates Daily and weekly news alerts LexTalk®Private Client: a Lexis®PSL community New and updated content Dates for your diary Trackers Latest Q&As Useful information Probate Committee key findings in enquiry into Probate Service delays With the general election announced on 22 May 2024 and Parliament subsequently dissolved, the Justice Committee’s enquiry into HMCTS Probate Service delays has ceased. On 23 May, its chair, Sir Robert Neill MP, wrote to Mike Freer MP outlining the committee’s principal conclusions to date. Among them was the observation that, until 2017, the Probate Registry managed application volumes, including in 2006 when the peak of 311,127 applications was recorded. The downturn in performance from 2017 was linked to the roll-out of a centralisation and digitisation programme, which led to the closure of...

See Q&A: In order for the downsizing addition to apply in a claim for the residence nil rate band, are there any conditions about where the deceased should have lived and with whom after they sold the qualifying former residential interest and downsized? Acknowledging that many older individuals might sell their family home so as to move to a smaller place, enter a residential care home, or meet the cost of nursing care, the original provisions in Finance Act 2015 were strengthened by Finance Act 2016 with steps designed to counter the potential loss of available residence nil rate band (RNRB) on downsizing. It applies to those who have downsized or sold their...

Residence nil rate band (RNRB) This Practice Note outlines the residence nil rate band (RNRB), once called the additional threshold and also referred to as the residential nil rate band or residential property nil rate band. It sets out what the RNRB is, when it can apply, how the figure is worked out and also the process for claiming it in practice. Although this Practice Note includes some links to worked examples, customers are directed to Practice Note: Q&As for extensive links to Q&As and worked examples showing how the RNRB operates across different practical situations and various scenarios in practice. The RNRB sits alongside the basic NRB and can further cut the inheritance tax (IHT) due on death. It is set against the taxable value of the estate, but unlike the basic NRB it is confined to being applied only to: the value of a residential property interest the estate on death, and the inheritance of lineal descendants estates not exceeding the...

IHT—residence nil rate band Q&As This Practice Note is designed to direct practitioners to Q&As and worked examples explaining the rules by which the inheritance tax (IHT) residence nil rate band (RNRB)—also called the additional threshold—and the transferable RNRB (brought-forward allowance) are worked out and applied on deaths occurring on or after 6 April 2017. For an overview of the RNRB, see Practice Note: IHT—residence nil rate band. Note that while new Q&As are added as they arise, individual Q&As are not updated and reflect the law as at the date shown in each instance. In particular, Q&As dated before 6 April 2025 are likely to discuss the domicile-based IHT regime, rather than the residence-based regime in force from that date. For details on the basic nil rate band (NRB) and the transferable NRB, and especially how to claim these reliefs and the key deadlines, see Practice Notes: IHT—nil rate band (NRB) and transferable NRB and IHT—calculation of nil rate band and transferable NRB. Identifying the qualifying residential...

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025), which received Royal Assent on 20 March 2025, brings in legislation to end the remittance basis of taxation and introduce a residence-based approach from 6 April 2025. It also makes residence, rather than domicile, the principal test for inheritance tax exposure. Additional reforms include updates to the rules on excluded property status, the removal of protected settlements status for offshore trusts, and revisions to overseas workday relief. For further detail, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. Who is an ‘offshore client’? This Practice Note examines typical ownership arrangements for UK residential property for offshore clients intending to use the property as a UK home. ‘Offshore clients’ refers to individuals who: up to 5 April 2025, are...

Where a surviving spouse holds an immediate post-death interest (IPDI) in a qualifying residential interest (see section 8H, Inheritance Tax Act 1984), their residence nil rate band (RNRB) can be increased by the transferable residence nil rate band (TRNRB) of the predeceasing spouse, provided a claim is made in such circumstances as appropriate...