Last updated: 14 October 2026
Can you claim inheritance tax relief on a home you moved out of?
Sometimes. The residence nil rate band (RNRB) of up to £175,000 applies when a home passes to direct descendants on death. If you sold or moved out of your home after 8 July 2015, for example into care or a smaller property, the downsizing rules can preserve the RNRB, as long as other assets of equal value pass to your children or grandchildren. A home you’ve moved out of but still own can also qualify, if it was your residence at some point.
The allowances in 2026/27
| Allowance | Amount |
| Nil rate band | £325,000 |
| Residence nil rate band | Up to £175,000 |
| Combined for a couple (with transfers) | Up to £1,000,000 |
| RNRB taper | Reduced by £1 for every £2 the estate exceeds £2 million |
These bands are frozen until 5 April 2031.
Vacated homes
The RNRB applies to a “qualifying residential interest”, meaning a property that has been the person’s residence at some point. It doesn’t have to be their home at death. So if someone moves into care and keeps their house, it can still qualify if it passes to direct descendants.
Downsizing relief
If the person sold the home, or moved to a cheaper one, the executors can claim downsizing addition:
- The sale or downsizing must be on or after 8 July 2015
- Assets of at least the value of the addition must pass to direct descendants
- The claim is made by the executors on the IHT return, within 2 years of death
Example
Margaret sold her home for £400,000 in 2022 and moved into a rented care home. She died in 2026, leaving £600,000 of cash and investments to her two daughters. Although she owned no home at death, the executors claim downsizing addition, so her estate gets the full £175,000 RNRB plus the £325,000 nil rate band. Only £100,000 is taxed at 40%, leaving IHT of £40,000.
Direct descendants
Children, grandchildren, step-children, adopted children and foster children count, as do their spouses. Nieces, nephews and siblings don’t.
Trusts
If the home passes into some types of trust, the RNRB may not apply. Bare trusts and certain trusts for bereaved minors and disabled persons can still qualify.
Making the claim
The RNRB isn’t automatic. Executors claim it on the IHT400 or with the IHT435 and IHT436 for unused allowances. If the estate is excepted, the claim is made more simply.
Common mistakes
- Assuming relief is lost because the person was in care at death
- Not claiming downsizing addition because no home was owned at death
- Leaving the home to a nephew or sibling, who are not direct descendants
- Missing the 2-year time limit for transferring unused RNRB from a spouse who died first
Ask the executors to collect sale completion statements and valuations of former homes, as these are needed to calculate the downsizing addition.
Frequently asked questions
Does the property have to be in the UK?
No, but it must have been a residence of the deceased.
What if the home was let out after I moved?
It can still qualify if it was your residence at some point.
Can I claim if the estate is over £2 million?
Only partly, due to the taper.
Does a buy-to-let qualify?
Only if you lived there at some point.
Related: the residence nil rate band on London property, reducing an estate below £2m and gifting the family home.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with vacated property IHT relief. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
