Can a couple really pass on £1 million tax-free?

Yes — but only where both spouses use the main £325,000 nil-rate band and the £175,000 residence nil-rate band, the home is closely inherited by direct descendants, and the estate is under the £2 million taper. Childless couples max out at £650,000.

Does the home have to be left under the will?

It can pass by will, intestacy, deed of variation, or as a 'gift with reservation of benefit' that ends on death. What matters is that the qualifying residential interest is closely inherited by a direct descendant.

What is the downsizing addition?

If the deceased sold or moved out of a former home on or after 8 July 2015, and the smaller home (plus cash or other assets equal to the lost RNRB) passes to direct descendants, the personal representatives can claim a downsizing addition on form IHT436 to preserve the band.

Eligibility · Residence nil-rate band

Am I eligible for the residence nil-rate band?

In short. An estate qualifies for the £175,000 residence nil-rate band when a qualifying home is left to direct descendants (children, grandchildren or their spouses) on death, and the net estate is no more than £2 million. The band tapers above £2m and is fully lost at £2.35m.

The residence nil-rate band (RNRB) is an Inheritance Tax allowance on top of the £325,000 main nil-rate band. It is claimed by the personal representatives on form IHT435, and any unused RNRB transfers to a surviving spouse or civil partner.

Last reviewed: 26 May 2026

·Amount: Up to £175,000 per person (frozen to April 2030). Combined with the main nil-rate band, couples can pass up to £1 million tax-free.

You likely qualify if…

The deceased owned a qualifying residential interest at death (a property they had lived in at some point)
The home passes to direct descendants: children, grandchildren, step-children, adopted or foster children, and their spouses or civil partners
The net estate (after debts) is under £2 million before the taper applies
Where the home was sold or downsized on or after 8 July 2015, the downsizing addition can preserve the band
Spousal transfer: any unused RNRB of a deceased spouse can be added to the survivor's RNRB at the second death

You likely don't if…

Estates where no home is left to direct descendants (e.g. property left only to siblings, nieces, parents or unmarried partners)
Childless individuals with no qualifying direct descendants
Estates over £2.35 million (single) or £2.7 million (couple) — the taper has wiped out the RNRB entirely
Buy-to-let only properties that the deceased never lived in
Homes left to most discretionary trusts (unless trust deed identifies direct descendants as the qualifying class)

How to check and claim

01HMRC's guidance and worked examples are at gov.uk/guidance/inheritance-tax-residence-nil-rate-band
02Use form IHT435 (RNRB claim) and IHT436 (transfer of unused RNRB) — without these the band is missed
03Free benefits calculators don't cover RNRB — for borderline estates over the £2m taper, take professional advice on lifetime gifting to bring the estate under the threshold

FAQ

Can a couple really pass on £1 million tax-free?: Yes — but only where both spouses use the main £325,000 nil-rate band and the £175,000 residence nil-rate band, the home is closely inherited by direct descendants, and the estate is under the £2 million taper. Childless couples max out at £650,000.
Does the home have to be left under the will?: It can pass by will, intestacy, deed of variation, or as a 'gift with reservation of benefit' that ends on death. What matters is that the qualifying residential interest is closely inherited by a direct descendant.
What is the downsizing addition?: If the deceased sold or moved out of a former home on or after 8 July 2015, and the smaller home (plus cash or other assets equal to the lost RNRB) passes to direct descendants, the personal representatives can claim a downsizing addition on form IHT436 to preserve the band.

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