IHT435 is the HMRC schedule that claims the residence nil rate band (RNRB) for someone who died on or after 6 April 2017, when their estate includes a home they owned and lived in that's inherited by their direct descendants. It goes in with the IHT400. The RNRB is applied before the ordinary nil rate band, and the form's notes put the maximum at £175,000 for deaths in 2020 to 2028.
This guide follows the IHT435 form (HMRC 04/25) and the GOV.UK residence nil rate band guidance, as of October 2026. It covers claiming the band on one estate. Claiming a late spouse's unused band is a separate schedule, IHT436.
Who IHT435 is for
The executor of an estate that's filing a full IHT400 account and wants the extra band. All three conditions on page 1 must be met: the death was on or after 6 April 2017, the estate includes a residence the deceased owned, and that residence is inherited by direct descendants. The form also allows a claim where the person downsized, sold or gave away a home on or after 8 July 2015.
The family members who qualify
Children, grandchildren, great-grandchildren and great-great-grandchildren count. For RNRB a child includes a stepchild, an adopted child, a foster child, and a child the deceased was guardian or special guardian for while under 18. Spouses or civil partners of those descendants count too, including a widow, widower or surviving civil partner who hadn't remarried before the death. Nephews, nieces and siblings don't. If no part of the estate passes to a direct descendant, question 1 ends the claim.
What counts as the residence
- Any property the deceased lived in as their home while it was in their estate. It doesn't have to be the main home, and there's no minimum period of ownership or living there.
- A buy-to-let they owned but never lived in doesn't qualify.
- If there was more than one residence, only one can be used, and you nominate which.
- The value is the deceased's interest less any mortgage or other debt charged on it.
- GOV.UK says the home doesn't have to be in the UK, but it has to be within the scope of Inheritance Tax, which depends on whether the person was based in the UK.
The form, question by question
| Questions | What they ask |
|---|---|
| 1 to 3 | Does anything pass to direct descendants; the total estate before reliefs; the chargeable estate from IHT400 box 108 |
| 4 to 12 | The residence: address, value at death, percentage passing to descendants, their names, exemptions or reliefs, grossing up, chargeable values |
| 13 and 14 | Any transferable RNRB from a spouse or civil partner who died first, taken from IHT436 |
| 15 to 18 | Downsizing allowance: the former property, the disposal date and its value then |
| 19 to 24 | Other assets passing to descendants, needed for downsizing |
| 25 | The available RNRB from the HMRC calculator |
Question 2 adds up figures from several schedules, including IHT400 box 91, IHT404 boxes 4 and 9, IHT417 boxes 3 and 8, IHT418 and IHT403. It's the total used for the taper test, so it has to include everything before reliefs and exemptions.
The percentage that trips people up
Question 7 wants the share of the home passing to direct descendants to 4 decimal places. HMRC's example: a home in the residue left to two children and a nephew is 66.6667%, two thirds, because the nephew's share doesn't count. Question 12 then wants the chargeable value of the descendants' part. In the form's note 11, a property worth £400,000 left half to the surviving spouse and half to a child gives £200,000 for the child's part.
When HMRC does the sums for you
If grossing up or interaction applies, the calculation gets complicated and HMRC says it'll do it, but you still complete the rest of the form. Grossing up applies when tax is due and the will makes tax-free gifts or part of the residue is exempt, for example to a spouse or charity. Interaction applies when business or agricultural relief is due alongside exempt shares or specific gifts. Answer yes at question 10 or 20 and don't use the calculator.
Downsizing and selling before death
The downsizing addition needs three things: the person disposed of a former home and either moved somewhere cheaper or stopped owning a home on or after 8 July 2015, that home would have qualified if kept, and at least some of the estate goes to direct descendants. If there were several disposals of the same property, you pick one date. The value to enter is the open market value of their interest at that date, less any mortgage, without deducting selling costs such as estate agent or solicitor's fees. If nothing other than the home passes to descendants, there's no downsizing allowance.
Limits to check before you claim
- The band is the lower of the value passing to descendants and the maximum available at the death.
- GOV.UK says it's tapered away for estates worth more than £2 million, by £1 for every £2 over.
- It's set against the whole estate, not just the home.
- Transferable RNRB from more than one late spouse is added up, but capped at the maximum for the year of death.
If a notice or letter mentions another form, the walkthrough of the trust anniversary charge return explains what it is.
The verdict
IHT435 rewards careful reading of page 1: if the home or a share of it goes to children or grandchildren, claim it. Use the GOV.UK calculator where you can, enter the descendants' percentage to 4 decimal places, nominate the right home if there's more than one, and let HMRC run the numbers when grossing up or interaction applies.
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A related form is explained in the walkthrough of the trust exit charge return.
Frequently asked questions
What is IHT435 used for?
It's the HMRC schedule used with the IHT400 to claim the residence nil rate band when a home passes to the deceased's direct descendants.
Who counts as a direct descendant for IHT435?
Children, grandchildren and further generations, including step, adopted and foster children, and their spouses or civil partners. Nephews, nieces and siblings don't.
Does a buy-to-let qualify for the residence nil rate band?
No. A property the deceased owned but never lived in, such as a buy-to-let, isn't a residence for RNRB.
How many decimal places does IHT435 want?
Question 7 asks for the percentage of the residence passing to direct descendants to 4 decimal places.
Is IHT435 the same as IHT436?
No. IHT435 claims the RNRB on the estate. IHT436 claims a late spouse's or civil partner's unused RNRB.
Can I claim RNRB if the person sold their home?
Possibly. A downsizing addition can apply if they sold, gave away or downsized from a home on or after 8 July 2015.
