Glossary

Residence Nil-Rate Band

An additional Inheritance Tax allowance (currently up to £175,000) where a main residence is left to direct descendants.

The residence nil-rate band applies on top of the standard nil-rate band, where a main residence (or its value) is left to direct descendants (children, grandchildren, including step-, adopted and foster).

The allowance tapers for estates over £2 million. It can be transferred between spouses, like the standard nil-rate band, allowing a couple's combined allowances to reach £1 million in many cases.

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