What is the Residence Nil Rate Band and how do you apply the additional RNRB threshold?
The Inheritance Tax Residence Nil Rate Band (RNRB) came into effect on 6 April 2017. It provides an additional nil rate band where an individual dies on or after 6 April 2017, owning a residence which they leave to direct descendants.
During the 2019/20 tax year, the maximum RNRB available is £150,000. This rises in £175,000 in 2020/21, after which it will be indexed in line with the Consumer Prices Index.
The RNRB is set against the taxable value of the deceased’s estate and not just the value of the property. Unlike the existing nil rate band (NRB), it doesn’t apply to transfers made during an individual’s lifetime. For married couples and registered civil partners, any unused RNRB can be claimed by the surviving spouse’s or registered civil partner’s personal representatives to provide a reduction against their taxable estate.
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