Personal Finance

Inheritance tax: Residence nil-rate band ‘valuable’ for families seeking to avoid IHT bill

For the current year, RNRB can add £175,000 onto a person’s total threshold if the home in the estate is left to children.

HMRC recently released statistics on IHT for the 2017-2018 period which really highlighted the importance of RNRB.

As detailed in the report: “In 2017-18, 3.9 percent of all UK deaths (620,000) resulted in an IHT charge. This is the first fall in this proportion since 2009-10, and is likely due to the introduction of an additional tax-free threshold in April 2017, known as the Residence Nil-Rate Band (RNRB).

“Prior to 2017-18, this proportion had been increasing; from 2009-10 to 2016-17, it grew by 0.3 percentage points a year on average.

“This is likely due to both rising asset values over the period and the freezing of the tax-free Nil-Rate Band (NRB) threshold at £325,000 since April 2009.

READ MORE: Inheritance tax: How to reduce your bill by four percent 


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