What is the residence nil-rate band?
The residence nil-rate band is an extra inheritance-tax allowance of up to £175,000 that applies when your main home passes to direct descendants — children, grandchildren, stepchildren or adopted children. It sits on top of the £325,000 nil-rate band, transfers between spouses, but tapers away for estates worth over £2m.
Detailed explanation
It was introduced to take the family home out of inheritance tax for many estates.
- Up to £175,000 extra, when a home passes to direct descendants.
- Transferable to a surviving spouse, like the main band.
- Tapered: reduced by £1 for every £2 the estate exceeds £2m, so very large estates lose it.
- Does not apply if the home is left to, say, a sibling or a friend rather than descendants.
A couple's combined allowances — two £325,000 nil-rate bands plus two £175,000 residence bands — total £1m, so a £1m estate with the home passing to the children pays no inheritance tax.
- Complete the questionnaireA few guided questions about you, your family and your wishes.
- Structured reviewYour answers are checked automatically for completeness and consistency before your will is produced.
- Receive your documentsYour will and supporting paperwork are produced, ready to print.
- Sign correctlyClear instructions on signing and witnessing so the will is legally valid.
- Protect your familyYour wishes are recorded and your loved ones are spared the intestacy default.
Sources
- GOV.UK — How Inheritance Tax works: thresholds, rules and allowances
- GOV.UK — Inheritance Tax: residence nil rate band
- HMRC — Inheritance Tax statistics 2024/25
- Reviewed by
- ClearLegacy editorial team
- Last reviewed
- June 2026
- Next review
- December 2026
- Jurisdiction
- England & Wales
Frequently asked questions
What is the residence nil-rate band?
It is an extra inheritance-tax allowance of up to £175,000 available when a main residence passes to direct descendants such as children or grandchildren. It is on top of the £325,000 nil-rate band and transfers between spouses.
Who qualifies for the residence nil-rate band?
Estates where the deceased's home (or its value) passes to direct descendants — children, grandchildren, stepchildren or adopted children. It tapers away for estates worth more than £2m and is lost if the home goes to non-descendants.
See your estate's risks in 3 minutes.
The free ClearLegacy Estate Risk Assessment flags the gaps that cause disputes, delays and tax.
Check my estate risk