Your Home Is in Your Spouse’s Name Only: Can You Still Claim the £175,000 Residence Allowance?

• The residence nil-rate band (RNRB) is £175,000 per person for the 2026 to 2027 tax year and is frozen at this level until 5 April 2030.
• A married couple or civil partnership can claim a combined RNRB of up to £350,000, even if only one spouse ever owned the home.
• Unused RNRB transfers to the survivor under Section 8G of the Inheritance Tax Act 1984, even if the first to die owned no property at all.
• The home must be left to direct descendants on the second death for the full combined allowance to apply.
• Estates above £2 million lose RNRB at £1 for every £2 over the threshold, and the allowance disappears entirely at £2.35 million.

Residence nil-rate band (RNRB). An additional inheritance tax allowance of up to £175,000 available when a qualifying home passes on death to direct descendants. Codified in Sections 8D to 8M of the Inheritance Tax Act 1984.

Qualifying residential interest (QRI). An interest in a dwelling that was, at any point during ownership, used as the deceased’s residence. Buy-to-lets and homes never lived in by the deceased do not qualify.

Transferable RNRB (TRNRB). The unused proportion of a deceased spouse’s RNRB that can be claimed by the survivor’s estate using form IHT436. Available even if the first spouse to die never owned a qualifying home.

The residence nil-rate band gives an extra £175,000 of inheritance tax-free allowance when a qualifying home passes to direct descendants on death. It sits on top of the standard £325,000 nil-rate band, applies to one property only, and is capped by the value of the qualifying interest closely inherited.

Combined with the £325,000 nil-rate band, a single homeowner can pass £500,000 to direct descendants free of inheritance tax, and a married couple or civil partnership can shelter up to £1 million. HMRC guidance confirms the RNRB is deducted before the standard nil-rate band when calculating the inheritance tax due.

Yes. The RNRB is not linked to which spouse holds legal title during life. It applies to the qualifying home that passes on death to direct descendants. Any unused RNRB on the first death transfers to the survivor under Section 8G of the Inheritance Tax Act 1984, even if the first to die owned no property at all.

HMRC guidance is explicit on this point: the transferable RNRB applies even where the first deceased never held a qualifying residential interest. Each spouse’s £175,000 is an independent allowance that follows the estate, not the asset. When the surviving spouse later dies owning the home and leaving it to direct descendants, both RNRBs can be combined against their estate.

On the first death, any unused RNRB is preserved for the surviving spouse’s estate. On the second death, personal representatives claim both allowances using forms IHT435 and IHT436, giving the surviving spouse’s estate up to £350,000 of RNRB against the value of the qualifying home left to direct descendants.

If the home-owning spouse dies first and leaves everything to the surviving spouse, the spouse exemption under Section 18 of the Inheritance Tax Act 1984 removes any inheritance tax charge and none of the £175,000 is used. If the non-owning spouse dies first, their RNRB is unused regardless. Either way, 100 percent transfers under Section 8G.

On the survivor’s death, the combined £350,000 RNRB applies provided the home passes to direct descendants and the estate stays below the £2 million taper. Personal representatives file form IHT436 within 24 months of the end of the month of the second death.

The most common mistake is assuming the £175,000 is wasted when only one spouse owns the home. It is not. The allowance is preserved through the transferable RNRB and recovered on the second death, provided the home passes to direct descendants and the estate stays below the £2 million taper threshold.

The question “but the house is only in my name, will my wife still get the £175,000?” comes up regularly in first meetings. The answer is usually reassuring. Around 19 out of 20 Bluebond clients legitimately pay zero inheritance tax, often because both RNRBs are combined with both standard nil-rate bands and the estate is structured to stay below the £2 million taper, which is the focus of Bluebond’s inheritance tax planning service. The taper reduces RNRB by £1 for every £2 over the threshold and removes it entirely at £2.35 million, calculated on gross estate value before reliefs such as business relief (BR). The real risk is rarely single-name ownership: it is poor will drafting, estates drifting above £2 million, or directing the home into the wrong kind of trust.

• Confirm whether you and your spouse are married or in a civil partnership. Cohabitees cannot transfer unused RNRB.
• Check that both wills leave the home, on the second death, to direct descendants as defined in Section 8K of the Inheritance Tax Act 1984.
• Estimate the gross estate value on the second death. Stay below £2 million where possible to preserve the full RNRB.
• Avoid leaving the family home into a discretionary will trust unless paired with a plan to appoint to direct descendants within two years.
• Keep records of any home sale or downsizing after 8 July 2015. A downsizing addition can preserve the RNRB even where no home is owned at death.
• Brief your personal representatives on filing forms IHT435 and IHT436 within 24 months of the second death.

• Leaving the home into a discretionary will trust without a deed of appointment to direct descendants within two years.
• Assuming the £175,000 is lost simply because the home is in one spouse’s name only.
• Reorganising property ownership late in life without specialist advice on gift with reservation of benefit rules.
• Ignoring the £2 million taper threshold when planning lifetime gifts, business sales, or pension changes.
• Missing the 24-month deadline for filing form IHT435 and form IHT436 after the second death.

No. The RNRB applies to the qualifying home that passes to direct descendants on death, not to historic ownership during life. A combined £350,000 is available to most married couples even when only one spouse has ever been on the deeds, provided the home is eventually left to direct descendants and the estate stays below the £2 million taper threshold.

The unused RNRB is still transferable. HMRC treats the first death as having used none of their RNRB, regardless of the date. The survivor’s estate can claim a full 100 percent uplift on the current £175,000 allowance using form IHT436, even where the first death occurred decades before the RNRB rules took effect.

The £175,000 residence allowance was designed to follow the family home into the next generation, not to reward whichever spouse holds the deeds. For most married couples, single-name ownership is a non-issue. The real planning work lies in keeping the estate below the £2 million taper, drafting wills that pass the home to direct descendants, and avoiding the trust structures that quietly forfeit the allowance.

You should carry out a review of how your assets are held and structured to highlight potential tax savings.

You should engage with a firm that can give you financial planning, tax advice, legal advice and accountancy advice under one client relationship, with regulated financial advice referred to our independent FCA-authorised partner firm and legal drafting handled by qualified solicitors employed within our business.  

You should work with advisers who coordinate financial planning, tax advice and legal work under one client relationship — with clear disclosure of who is regulated for what. Bluebond Tax Planning Ltd provides tax planning and coordination only; any advice on your investments, personal pension or annuity is FCA-regulated and referred to our independent partner firm — no company in the Bluebond group is FCA-authorised or an SRA-authorised law firm. Individual outcomes depend on personal circumstances and cannot be guaranteed.

If you need any help or advice in this complex area please contact us. We will help you mitigate your inheritance tax.

The Bluebond IHT Mitigation Plan provides a structured review of nil-rate bands, ownership structure and will drafting. The next free Bluebond webinar walks through how the residence allowance interacts with the wider estate.

Disclaimer. The information in this article is general in nature and does not constitute personal financial, tax, or legal advice. UK tax legislation changes frequently, and the specific application of any rule or strategy depends on individual circumstances. Figures, thresholds, and reliefs mentioned are correct as of the 2026 to 2027 tax year unless otherwise stated. Before acting on any information here, consult a qualified adviser who has reviewed your full situation. Bluebond Tax Planning provides personal recommendations only under a signed client agreement, following a full review. Bluebond Tax Planning operates under UK legal frameworks and recognised professional conduct standards. Tax planning and legal work are not FCA regulated.