The Residential Nil Rate Band (RNRB), which has also been referred to as the Main Residence Nil Rate Band, was announced in the Summer 2015 Budget and will take effect from 6 April 2017.

The RNRB will be an additional allowance to the current nil rate band (NRB) which currently stands at £325,000 and will be frozen at this figure until the end of 2020 to 2021 tax year.

The RNRB will be introduced in stages until it reaches the full amount of £175,000 after 6 April 2021. From this point onwards it will rise each year in line with the Consumer Prices Index.

RNRBThe new allowance will be phased in as follows:

  • £100,000 for 2017 to 2018
  • £125,000 for 2018 to 2019
  • £150,000 for 2019 to 2020
  • £175,000 for 2020 to 2021

This will mean that by 2020-21 married couples and civil partners may pass on up to £1 million worth of assets to their children and grandchildren free of inheritance tax.

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