Iht Home
Doc dated 18 April 2025
In the UK, the inheritance tax (IHT) allowance regarding the matrimonial home is primarily covered under two main allowances:
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Nil-Rate Band (NRB) — Standard Allowance
• Every individual has a £325,000 inheritance tax-free threshold.
• This is called the nil-rate band.
• Assets up to this amount can be passed on tax-free upon death.
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Residence Nil-Rate Band (RNRB) — Additional Allowance for the Home
If you leave your main residence to a direct descendant (e.g., children, stepchildren, grandchildren), an additional allowance applies:
• Up to £175,000 per person (on top of the standard £325,000).
• Applies only to one home and only if it was a residence at some point.
• Must go to a direct descendant to qualify.
• If the estate exceeds £2 million, the RNRB tapers off by £1 for every £2 over the threshold.⸻
Combined Threshold for Married Couples or Civil Partners
• Spouses and civil partners can inherit from each other tax-free (no IHT between them).
• Unused NRB and RNRB from the first partner’s estate can be transferred to the surviving spouse.
• This means the combined total allowance could be:
• £325,000 + £175,000 = £500,000 per person
• Up to £1 million per couple if both allowances are fully available and used
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Example
A couple leaves their family home (valued at £800,000) to their children:
• First death: no IHT due (assets pass to spouse).
• Second death: if full allowances are available, £1 million threshold applies, and the entire value may pass tax-free.⸻
Let me know if you want details about trusts, taper relief, or downsising protections under the RNRB.