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HMRC internal manual

Inheritance Tax Manual

Basic Principles: Introduction: Phasing-in RNRB

The residence nil-rate band (RNRB) is being phased in over four tax years, starting on 6 April 2017. The maximum amounts available to an individual are

£100,000 for the tax year 2017/2018

£125,000 for the tax year 2018/2019

£150,000 for the tax year 2019/2020, and

£175,000 for the tax year 2020/2021.

After the tax year 2020/2021 these values will automatically increase each year by reference to the Consumer Prices Index (CPI), unless the Treasury specifies an alternative value – IHTA84/S8D(8)

If the RNRB has not been fully utilized on the estate of the first to die of a married couple or civil partnership the unused part can be transferred to the second estate. Where the full entitlement to transferred RNRB exists, an estate can qualify for a total RNRB of

£200,000 for the tax year 2017/2018

£250,000 for the tax year 2018/2019

£300,000 for the tax year 2019/2020, and

£350,000 for the tax year 2020/2021.

The amount of RNRB that is actually due on any particular estate starts to be withdrawn where the value of the estate exceeds the taper threshold (IHTM46023). When this threshold is exceeded the RNRB is reduced by £1 for every £2 of value by which an estate exceeds the taper threshold.

The taper threshold is £2 million until 5 April 2021. After the tax year 2020/2021 the taper threshold will automatically increase each year by reference to the Consumer Prices Index (CPI), unless the Treasury specifies an alternative value – IHTA84/S8D(8)

So for example an estate valued at £2,350,000 in the tax-year 2020/21 and only entitled to the individual RNRB of £175,000, would see that RNRB tapered to nil. More detail is provided at IHTM46023.