Residence nil rate band (UK inheritance tax)
The residence nil rate band can increase the inheritance-tax threshold where the deceased’s qualifying residential interest is inherited by direct descendants, subject to statutory conditions and the value of that interest. For 2025–26 the individual maximum is £175,000; a qualifying unused amount may be transferred to a surviving spouse or civil partner. Actual entitlement can be lower and is subject to further rules. The TX-UK June 2026–June 2027 guide excludes detailed downsizing and taper calculations.
Worked example
A person dies in 2025–26 leaving a qualifying home interest worth £200,000 to their child. Assuming all other conditions are met and no adjustment applies, the maximum individual residence band available is £175,000, in addition to any standard band available.
Common mistake
Assuming every estate automatically receives the residence band, or that its amount can exceed the qualifying residential interest inherited by direct descendants.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |