Inheritance Tax- The Residence Nil Rate Band (RNRB)
The 2015 Summer budget announced the introduction of the residence nil rate band for inheritance tax. This measure introduces an additional nil-rate band when a residence is passed on death to a direct descendant. This is in addition to the standard Inheritance Tax Nil Rate Band (NRB) of £325,000 per person and is designed to give a married couple a combined IHT free amount of £1m on death from 6th April 2020.
This will be:
- £100,000 in 2017 to 2018
- £125,000 in 2018 to 2019
- £150,000 in 2019 to 2020
- £175,000 in 2020 to 2021
Of course, these are the maximum amounts. The available allowance will be reduced if the value of the property is less than this.
For example, a Betty Jones dies in 2020/21 and her will gifts her 50% share in the family home to her children. If this sha