The RNRB was introduced in 2017 with the aim of protecting the family home from IHT. The RNRB, currently set at a maximum of £175,000 per person, is an additional IHT free amount over and above the standard IHT nil rate band (NRB), which is currently set at £325,000 and also frozen until April 2026.

The RNRB, together with the standard NRB, gives each individual a potential IHT free allowance of £500,000 (£325,000 + £175,000), or £1m for a married couple or civil partners. The IHT savings can therefore be considerable.

However, the RNRB is reduced by £1 for every £2 of excess if the overall value of the deceased’s net estate exceeds £2m (otherwise known as the taper threshold). Where the estate is worth £2.25m or more, the RNRB is lost completely.

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