Default Inflation / Growth Rates - IHT Property Exemption Escalation Rate (taper threshold for Residence Nil Rate Band)

The Residence Threshold Escalation preference allows advisers escalate the phase-out threshold for the Residence Nil Rate Band (RNRB).

The additional Residence Nil Rate Band is:

£100,000 in 2017/2018
£125,000 in 2018/2019
£150,000 in 2019/2020
£175,000 in 2020/2021 to 2027/2028

The software is coded with these values. The RNRB increases in line with Consumer Prices Index (CPI) from 2028 onwards. CPI is another of the software's settings. Read more about the software's CPI setting here.

Any unused nil-rate band can be transferred to a surviving spouse or civil partner. This is accounted for in the software's IHT calculations and can be seen in the Legacy screen for couples. For widows/widowers you can input details of inherited RNRB in Carryover Assumptions. Click here for more detail.

There is a tapered phase-out of the additional nil-rate band for estates with a net value of more than £2 million. The RNRB will be phased out at a rate of £1 for every £2 over this threshold. It is this threshold of £2 million that is escalated at the rate set by the IHT Property Exemption Escalation Rate found in Plan Settings.



Further reading

Plan Settings master list

How to set custom preferences (plan settings) for your subscription