Residential Nil Rate Band (RNRB)

Online Will Writing Blog Article
Property Trusts
Table of Contents
    Add a header to begin generating the table of contents

    In April 2017 there will be a new Nil Rate Band available to some UK families, it’s called the Residential Nil Rate Band (RNRB) and is designed to allow families to pass the family home to their children without any Inheritance Tax.

    Families that can make use of this allowance have estates ranging between £650,000 and £2,000,000 and must own a home.

    The new allowance isn’t an increase of the existing Inheritance Tax limit to £1million as has been widely reported, it is an additional allowance that, if used correctly, can mean that a family can pass up to £1million without Inheritance Tax. There’s a subtle difference here in that there are 2 Nil Rate Band’s per person, the existing one remains at £325,000 and the new RNRB which, growing from April 2017 to April 2020, will eventually allow another £175,000 tax free making the total £500,000 per person.

    Both Nil Rate Bands need to be used separately in the wills of many families, particularly on first death where it is important that certain rules are adhered to.

    The main element of the RNRB is that the deceased’s share of the family home or part of that share must pass directly or via a Life Interest Trust to the children or step children of the deceased. This means that people with wills that, on first death, pass everything to the surviving spouse may not qualify. They need to review their wills and make the necessary alterations.

    If your estate falls in the band described above then you may want to make use of the RNRB to maximise the allowance on first and second death. We have developed and had approved a strategy for making this happen, treating both Nil Rate Bands separately, the existing Nil Rate Band being placed into a Nil Rate Band Discretionary Trust (used widely for flexibility, longevity and asset protection) at the same time placing a share of the family home or Principal Private Residence (PPR) into a Life Interest Trust naming the children as ultimate beneficiaries but allowing the surviving spouse to use the house for the rest of their lives. Our fee for these wills is detailed here.

    Property Trusts
    Family home Property

    If you need to read more about this new allowance, go to the government website and search RNRB, all the rules are there and a number of case studies.

    If you are unsure if your personal situation could make use of this please contact us and we’ll be able to clear things up for you.

    Share this post

    Matt Walkden Will Writer

    About Matt Walkden

    I am a Professional Will Writer and I offer a small number of other products that complement my Will Writing such as Lasting Power of Attorneys (LPA’s), Fixed Price Estate Administration, often called Probate and some Property Products such as changing a family home from Joint owners to Tenants in Common.

    Contact An Expert Today

    Pay by Card or PayPal

    Read why over 13,000 people have written a will with us...

    As well as the many hundreds of times our clients recommend us to their friends and families, please read what some of them have written to us and said…

    “They really do cover everything thoroughly and provide comprehensive supporting information with friendly and empathetic telephone support, during what could be for some people, a traumatic process. I am so pleased thatI found them whilst doing a lot of research online and I can now rest assured that my legacy is in safe hands.”
    Mrs R. Dow, Cornwall
    “I’m very impressed with the service that your company has offered and how quick and hassle free the process has been. I will definitely recommend your service to my family and friends.”
    Miss D. Blakley – Kent
    “Please be assured that I have found your service to be nothing short of exceptional and will have no hesitation in recommending yourselves to anyone considering making a Will.”
    Mr A. Sharp, Cornwall

    Worked with us recently? Leave us a review.

    Latest Blog Posts

    When it comes to your peace of mind and your family’s welfare, the right time is now. Take a few moments to start the process of creating your will today and receive the first draft in as little as 48 hours.

    Deceased Estate Online Will Services

    Deed of Variation

    Deed of Variation and the three main ways that they can be used to protect assets and reduce Inheritance Tax
    Read More
    Will Writing Guardians

    The Importance of Family Will Writing

    Many people, especially young families, postpone family will writing. Maybe it is because it may seem unpleasant, far off, or it appears as a physical ...
    Read More
    Town Houses Blog

    Your Home

    Make Sure the Right People Inherit Your Home For most of us these days our home is our biggest asset. And with mortgage interest rate ...
    Read More