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How to claim the residence nil rate band using IHT435

The Residence Nil Rate Band is worth up to £175,000 per person — or £350,000 for a couple where neither used their allowance.

For a family home passing to children, it can mean the difference between paying 40% IHT on part of the property value or paying nothing.

But the rules contain several traps: the property must have been the deceased's home at some point, it must pass directly to a descendant (not a sibling or niece), and discretionary trusts break the claim.

This walkthrough covers how to establish eligibility, handle the downsizing addition, and complete the IHT435 correctly.

✓ Official source checked 2 September 2026 · GOV.UK last updated that page 6 April 2025IHT435 on GOV.UK
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Official form · always current

This is the same official IHT435 file HM Revenue & Customs publishes on GOV.UK — the link below fetches the current version live from GOV.UK the moment you click it, so it can never go out of date.

Current version: April 2025 · confirmed on GOV.UK 2 September 2026

This walkthrough takes IHT435 field by field, in plain English. Most of the form is administrative; the hard part is eligibility — whether the home qualifies, who it passes to, and whether a trust quietly sits in the way.

The mistake that changes the calculation
Property left via a discretionary trust does not qualify for the RNRB, even if the trustees ultimately appoint the property to children.

Wills that use a discretionary trust as a default beneficiary — a common drafting pattern from the 1990s–2000s intended to be IHT-efficient — can inadvertently forfeit the RNRB entirely.

A deed of appointment unwinding the trust within 2 years of death under IHTA 1984 s.144 may rescue the claim, but requires legal advice promptly after death.
The form, in summary

The IHT435 form, in summary.

Valoren
IHT4356 pages28 fields guided
With Valoren30 minutes
Without Valoren1–2 hours
the challenge is confirming the property passed to qualifying descendants
Deadline
6 monthsinterest starts;
filed with IHT400
Who Files
Executoror administrator
with IHT400
£
Fee
Freeschedule to
IHT400
Filed with HMRC
Draws from your Estate File
the records this form is built from
PersonalProperty Folio·Legal Instruments·Succession Plan·Digital Access Map·Financial Accounts·Asset Inventory·Income & Outgoings·Civil Dossier·Policy Index·Medical Abstract·Digital Legacy Registry·Business Interests & Directorships·Funeral & Committal Wishes·Dependent Care & Handoff·Personal Record·RegistryMaster Registry·Renewal Register·People, Authority & Contacts·Designated Places·Kinship & Succession Map·SecureAccess Controls·Recovery Routes·Custody & Contingency·EventsDeath & Estate Activation·Incapacity & Medical Proxy·Absence & Continuity Cover·Access Loss & Identity Recovery·Legal Dispute & Evidence Protocol·Theft & Asset Compromise·Property Damage & Incident Response·Relocation & Address Update Protocol·Separation & Custody Documentation·Business Interruption & Continuity·PersonalProperty Folio·Legal Instruments·Succession Plan·Digital Access Map·Financial Accounts·Asset Inventory·Income & Outgoings·Civil Dossier·Policy Index·Medical Abstract·Digital Legacy Registry·Business Interests & Directorships·Funeral & Committal Wishes·Dependent Care & Handoff·Personal Record·RegistryMaster Registry·Renewal Register·People, Authority & Contacts·Designated Places·Kinship & Succession Map·SecureAccess Controls·Recovery Routes·Custody & Contingency·EventsDeath & Estate Activation·Incapacity & Medical Proxy·Absence & Continuity Cover·Access Loss & Identity Recovery·Legal Dispute & Evidence Protocol·Theft & Asset Compromise·Property Damage & Incident Response·Relocation & Address Update Protocol·Separation & Custody Documentation·Business Interruption & Continuity·
Legal basisStatute

The Residence Nil Rate Band (RNRB) is an additional nil rate band available when a residential property (that the deceased occupied as a home at some point) passes on death to direct descendants.

The RNRB is £175,000 per person in 2024/25 and is frozen until at least 2028.

An estate that qualifies for both the standard NRB (£325,000) and the full RNRB has a combined tax-free threshold of £500,000 — or £1 million for a couple where both allowances transfer.

The RNRB is tapered for estates valued at more than £2 million: £1 of RNRB is lost for every £2 of estate value above £2 million.

Section by section

The form, section by section.

Before you start, you’ll need:
  • Who Files — The executor or administrator, as part of or alongside the IHT400 account
  • 6 pages · 28 fields guided
  • Draws from your Estate File — Property Folio, Legal Instruments, Succession Plan
Section 1

Does the estate qualify? — the four eligibility tests

All four tests must be passed before the RNRB can be claimed. The estate fails if any one of them is not met.

Test 1: There must be a qualifying residential interest (QRI)

A QRI is an interest in a dwelling house which has been the deceased's residence at some point during their ownership.

It does not need to be the main residence at death — a property lived in years earlier qualifies.

A buy-to-let property that was never lived in by the deceased does NOT qualify.

A property held in trust usually does not qualify (there are limited exceptions).

Test 2: The QRI must pass to a direct descendant

Direct descendants are: the deceased's child, grandchild, or remoter descendant (including stepchildren, adopted children, and fostered children); the spouse or civil partner of any of those descendants; or a direct descendant's former spouse/civil partner if they have not remarried.

Siblings, nephews, nieces, friends, and charities do NOT qualify — even if they were the closest surviving relatives or had a long relationship with the deceased.

Test 3: The QRI must 'closely inherit'

The property must pass outright to a direct descendant (or to their spouse).

If it passes to a discretionary trust — even one whose beneficiaries are all children — the RNRB is lost.

Exceptions: bare trusts, disabled trusts, and trusts for a bereaved minor do qualify.

A deed of variation or appointment within 2 years of death can redirect the property and potentially rescue the claim.

Test 4: The estate must not exceed the taper threshold

The estate value for RNRB purposes includes all assets in the estate (including business and agricultural property before relief, and jointly owned assets).

For 2024/25, once the estate exceeds £2 million, £1 of RNRB is lost for every £2 of value over that threshold.

At £2.35m for a single person (or £2.7m for a couple using both RNRBs), the allowance is fully tapered to zero.

All four tests must be passed before the RNRB can be claimed. The estate fails if any one of them is not met.

HM Revenue & Customs (HMRC) · IHT435
Section 2

Completing the IHT435 form — property details

Once eligibility is confirmed, IHT435 needs the specific details of the qualifying residential interest: the property, how it was held, its value, and to whom it is passing.

Property details

The address of the qualifying residential interest.

If there are multiple properties that could qualify (e.g. the deceased had two homes), you can only use one as the QRI — choose the one with the highest value for maximum RNRB benefit.

Enter the title number if the property is registered with Land Registry (speeds up HMRC's verification).

How the property is held

Sole ownership; joint tenancy (survivor takes all — the deceased's share is typically 50% of the value); tenancy in common (the deceased's share is whatever was agreed, stated in a declaration of trust if one exists); or leasehold.

For joint tenancies, enter only the deceased's share of the value.

Date of acquisition and value

The date the deceased first acquired an interest in the property (the date they started living in it).

The value at the date of death — this should match the figure on IHT400 schedule F1 (houses, land, and buildings).

Use the open market value as at the date of death, not the purchase price.

Who inherits the property

Name and relationship of each direct descendant who inherits the qualifying residential interest, and the share they receive.

If a surviving spouse inherits first with the property passing to children on the second death, the RNRB is claimed on the second death — not the first.

Once eligibility is confirmed, IHT435 needs the specific details of the qualifying residential interest: the property, how it was held, its value, and to whom it is passing.

HM Revenue & Customs (HMRC) · IHT435
Section 3

The downsizing addition

If the deceased sold their home (or moved to a smaller one) after 8 July 2015 and would have qualified for the RNRB if they had still owned it at death, an equivalent amount of RNRB can still be claimed against other assets that pass to direct descendants.

What the downsizing addition allows

Where the deceased sold or moved to a less valuable home after 8 July 2015, the RNRB they have 'lost' by no longer owning a qualifying property (or owning a smaller one) is preserved as a downsizing addition.

The addition can be set against other assets in the estate (cash, investments, jewellery) that pass to direct descendants — the RNRB does not have to be used against a property.

The calculation

The downsizing addition is the lesser of: (1) the lost RNRB (what the RNRB would have been if the deceased had still owned the former property); and (2) the value of assets other than the qualifying residential interest that pass to direct descendants.

This requires knowing the date and value of the former home when sold.

Evidence needed

The date of disposal of the former home; the sale price (or value at the date of disposal); evidence that the property had been the deceased's residence.

Solicitor completion statements, estate agent correspondence, or Land Registry entries can all provide this.

HM Revenue & Customs (HMRC) · IHT435
Section 4

Transferring a deceased spouse's unused RNRB — IHT436

If the deceased was widowed (or had a predeceased civil partner) and that earlier death was after 5 April 2017, any RNRB that was unused on the earlier death can be transferred and added to the surviving spouse's RNRB claim. This uses a separate form — IHT436 — but is covered here because it is almost always relevant when IHT435 is filed.

How the transfer works

The percentage of RNRB unused on the earlier death is calculated and transferred as a percentage of the surviving spouse's RNRB.

If the first spouse died with an estate of £200,000 and the RNRB was £150,000 at the time, 100% of the first RNRB transferred (because it was unused).

That 100% is then added to the survivor's own RNRB, giving a combined RNRB of £350,000 (in 2024/25).

What you need to claim the transfer

A copy of the grant of probate from the earlier death; the IHT400 and IHT435 (if filed) from the earlier estate; evidence of the property position at the earlier death.

If no IHT400 was filed on the earlier death (because the estate was below the threshold), you can still transfer the RNRB — but you need evidence that the earlier death was a married couple/civil partners, and of the estate value at that time.

The 2-year limit

The claim for transferred RNRB must normally be made within 2 years of the end of the month of the second death.

This deadline can be extended by HMRC in exceptional circumstances, but do not rely on this.

HM Revenue & Customs (HMRC) · IHT435
Section 5

The RNRB and trusts — the trap in many standard wills

The interaction between the RNRB and discretionary trusts is the most common reason estates fail to claim an allowance they expected. Many wills drafted before 2015 use discretionary trusts in ways that forfeit the RNRB.

Why discretionary trusts lose the RNRB

The RNRB requires the property to 'closely inherit' — meaning it passes directly to a direct descendant.

A discretionary trust is not a direct descendant.

Even if the only beneficiaries are children and grandchildren, a discretionary trust fails the test.

The trustees' power to appoint the property to individuals does not fix this — the RNRB is assessed at the date of death.

The 2-year window for deed of appointment

If the will creates a discretionary trust and the trustees appoint the property out of the trust to a direct descendant within 2 years of the date of death, IHTA 1984 s.144 treats the appointment as if it were made by the will itself.

This can rescue the RNRB — but requires legal advice promptly and a formal deed of appointment.

The 2-year clock is firm.

Nil rate band discretionary trusts from the 1990s–2000s

A common drafting pattern from before 2007 (when transferable NRBs became available) was to leave the nil rate band amount to a discretionary trust for the children, with the rest to the spouse.

This achieved NRB efficiency but will often forfeit the RNRB on the second death if the trust still holds assets.

Executors should take legal advice on whether to wind the trust up before or shortly after the second death.

The interaction between the RNRB and discretionary trusts is the most common reason estates fail to claim an allowance they expected. Many wills drafted before 2015 use discretionary trusts in ways that forfeit the RNRB.

HM Revenue & Customs (HMRC) · IHT435

Many people file IHT435 themselves — that is what this walkthrough is for. If the estate behind it has stopped being simple — inheritance tax to pay, a trust, foreign assets, a dispute — Signum, Valoren’s own specialist desk, can take it on, and we say so plainly: it starts with a free intake, and if you do not need us, we will tell you. Prefer an independent adviser? STEP and the Chartered Institute of Taxation both keep public member directories, and neither pays Valoren a referral fee.

FAQ

IHT435 questions, answered.

IHT435 is the HMRC schedule used to claim the Residence Nil Rate Band (RNRB) — an additional inheritance-tax allowance, £175,000 per person in the 2024/25 tax year (frozen until at least 2028), available when a home the deceased lived in at some point passes on death to their children or other direct descendants.

It is filed as a supplementary schedule to the IHT400 account.
The executor named in the will, or the administrator if there is no will, completes it as part of (or alongside) the IHT400 inheritance-tax account.
When filed with IHT400, it follows the IHT400 timetable — the account must be delivered within 12 months of the end of the month in which the person died, though any Inheritance Tax owed is due earlier, by the end of the sixth month.

The RNRB itself can also be claimed by a standalone application up to 2 years after the end of the month of death (the same 2-year window applies to transferring a late spouse's unused RNRB on form IHT436, and to a deed of appointment rescuing a trust under IHTA 1984 s.144).

HMRC can extend the 2-year limit in exceptional circumstances, but do not rely on it.
No. IHT435 is a supplementary schedule to the IHT400 account and carries no separate fee.
The property's address, title number and how it was held; its open market value at the date of death; the will and any trust deeds; and evidence of who inherits the home and their relationship to the deceased.

For a downsizing addition you also need the date and price of the former home's sale; for a transfer you need the earlier death's grant of probate and any earlier IHT account.
Assuming the RNRB is available when the home passes through a discretionary trust.

The allowance requires the property to 'closely inherit' — pass outright to a direct descendant — so a discretionary trust forfeits it even if every beneficiary is a child or grandchild.

Many wills drafted in the 1990s–2000s use this pattern.

A deed of appointment unwinding the trust within 2 years of death under IHTA 1984 s.144 may rescue the claim; check HMRC's guidance and consider professional advice before relying on it.

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Where this fits

IHT435 is one form. The file behind it is the rest.

Forms are easier when the records are ready.

For IHT435, that means the property's title and ownership details, the will and any trust deeds, evidence of who inherits the home and their relationship to the deceased, the date-of-death valuation, and — for a transfer or downsizing claim — the earlier death's grant and the former home's sale details.

When you're ready — not before — our £179 Executor's First Hour walks you through registering the death, notifying banks and pensions, and getting probate started, in the right order. The free checklist above covers the essentials; this is for when you'd rather have a hand to hold. Executor's First Hour — £179

HM Revenue & Customs (HMRC)28 fieldsNo separate fee — supplementary schedule filed with IHT40030 minutes with Valoren
The return this attaches to

This is one schedule. It attaches to the IHT400 — the main Inheritance Tax account — which is where every schedule you complete comes together.

Next: IHT400
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