Mark McLaughlin looks at when a property is ‘closely inherited’ for inheritance tax residence nil-rate band purposes.
The ‘residence nil-rate band’ (RNRB) can shelter all or part of an individual’s residential property value from inheritance tax (IHT), if certain conditions are satisfied.
The maximum RNRB per individual is £175,000 (for 2025/26). If the family home was jointly owned by a married couple or civil partners, up to £350,000 per couple is available. When combined with the standard IHT nil-rate band of £325,000 each, the combined estate values of the couple for IHT purposes can therefore be reduced by up to £1m.
Let’s assume here that an individual’s will leaves their residential property to another individual (as opposed to a trust).
