The Government have introduced an Inheritance Tax Residence Nil Rate Band (RNRB) in addition to the existing Inheritance Tax allowance of £325,000 and the Transferable Inheritance Tax allowance (where the first spouse or civil partner to die leaves his or her entire estate to the survivor).
The RNRB is available to individuals dying after 6 April 2017 leaving their main residence to lineal descendants. It can be carried forward to a surviving spouse or civil partner. The RNRB is tapered if the deceased’s person’s estate exceeds a threshold (initially £2 million) at death. There is provision for a downsizing addition that can be claimed where the deceased downsized from a more valuable property or ceased to own residential property altogether on or after 8th July 2015 and some part of the estate is inherited by a lineal descendant.