Details of the new ‘Residence Nil Rate Band’ (RNRB) and the effect of downsizing

Details of the new ‘Residence Nil Rate Band’ (RNRB) and the effect of downsizing


HM Revenue & Customs have published a technical note covering the proposals, announced in the Summer Budget 2015, to introduce a new ‘Residence Nil-Rate Band’ (RNRB), to be phased in from 6 April 2017, when a residence is passed on upon death to a direct descendant of the deceased.

Overview of the proposals announced

The proposed level of the ‘Residence Nil-Rate Band’ (RNRB) is as follows:

£100,000 for 2017/18
£125,000 for 2018/19
£150,000 for 2019/20
£175,000 for 2020/21

It is proposed that from 2021/22 onwards the band will rise in line with the consumer price index (CPI).

Broadly, the proposals provide that where part or all of the RNRB might be lost because the deceased has downsized to a less valuable residence, or has ceased to own a residence, the lost RNRB will still be available, providing certain qualifying conditions are met. The intention is that an estate will remain eligible for the proportion of the RNRB foregone as a result of downsizing or disposing of a residence as an addition to the RNRB otherwise available on death.

If the proposals are enacted, the qualifying conditions for this additional ‘downsizing-related’ RNRB will be broadly the same as those for the RNRB.

For more information or to discuss your tax affairs in general, please contact our Tax Partners, Steve Crompton or Chris Barrington on the details below:

Steve Crompton
Partner – Head of Tax
direct dial: 01942 292541
mobile: 07790 840394

Chris Barrington
Tax Partner
direct dial: 01942 292505
mobile: 07730 436070