Residence Nil Rate Band and Unmarried Couples

What is the Residence Nil Rate Band?

The Residence Nil Rate Band is an additional IHT allowance that can apply when a qualifying residential interest is closely inherited by direct descendants. It sits alongside the ordinary Nil Rate Band and is subject to conditions, including tapering for larger estates.

Why unmarried couples are different

Transfers between spouses and civil partners can benefit from important IHT exemptions and transferable allowances. Cohabiting partners do not automatically receive the same treatment, however long they have lived together.

What happens if the first partner dies?

If assets are left to the unmarried partner, that transfer is not automatically covered by the spouse exemption. Depending on the estate value and available allowances, IHT may therefore arise at the first death in circumstances where a married couple might have a different result.

Can the home still qualify for RNRB?

Potentially, but the detailed conditions must be met. The allowance focuses on a qualifying residence passing to direct descendants, not simply on whether the deceased owned a home. The way the Will is drafted and who ultimately inherits can matter.

Intestacy risk for cohabiting couples

An unmarried partner does not automatically inherit under intestacy. If you want a cohabiting partner protected, a Will is especially important. See our Unmarried Couples guide.

Property ownership matters too

Jointly owned property can pass outside the Will by survivorship, while a tenants-in-common share can pass under the Will. The tax and succession analysis therefore needs both the title structure and the Will. See Tenants in Common.

Large estates and tapering

The Residence Nil Rate Band is tapered for estates above the statutory threshold. Couples with significant property, business or investment wealth should obtain specialist tax advice rather than relying on a headline allowance figure.

Planning checklist for unmarried couples

• make or update Wills;
• check joint-property ownership;
• review beneficiary nominations;
• understand the potential IHT position on first and second death;
• consider LPAs because cohabiting partners do not automatically gain decision-making authority.