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Main Residence

Also known as: Primary Residence, Family Home, Principal Residence

Definition

Your main residence is the property you live in as your home, which may qualify for an additional £175,000 inheritance tax allowance when left to your children or grandchildren.

Understanding your main residence is crucial for inheritance tax planning—getting this right can save your family up to £70,000 in inheritance tax, or £140,000 for couples.

What Does Main Residence Mean?

In England and Wales, your main residence is any property you have lived in as your home while you owned it. Under the Finance (No. 2) Act 2015 and HMRC guidance, this property may qualify for the residence nil-rate band (RNRB)—an additional £175,000 tax-free allowance (2025-26 tax year) when you leave it to direct descendants. HMRC explicitly states that a residence is "any property that the deceased lived in as their home while it was included in their estate. It does not have to be their main home, or have been lived in or owned for a minimum period."

Only one property can qualify for the RNRB, even if you own multiple homes. If you own more than one property, your executors can nominate which one counts as your main residence—typically the highest value property to maximise tax relief. The property must be left to direct descendants (children, grandchildren, or step-children) and you must have actually lived in it as your home. Buy-to-let properties or investment properties you never occupied cannot qualify, regardless of their value or how long you've owned them.

Sarah, 68, owns a flat in London worth £600,000 and a cottage in Cornwall worth £280,000. She lived in the London flat for 15 years before buying the Cornwall cottage where she now spends most of her time. Both properties qualify as residences because she lived in each. Her executors can nominate the London flat as her main residence to claim the full £175,000 RNRB. Combined with her standard £325,000 nil-rate band, she can pass £500,000 tax-free to her two children.

The residence nil-rate band tapers for estates over £2 million—you lose £1 of RNRB for every £2 your estate exceeds this threshold. Estates over £2.35 million (2025-26) lose the RNRB completely. If you've downsized to a smaller home or moved to a care facility after 8 July 2015, special downsizing provisions may protect your RNRB eligibility. For married couples and civil partners, unused RNRB can transfer to the surviving spouse, creating a combined £350,000 residence allowance and total tax-free threshold of £1 million.

Common Questions

"Does my home have to be my only property to qualify as my main residence?" No, you can own multiple properties and still have a main residence. If you own more than one home, your executors can nominate which property should count as your main residence for the residence nil-rate band. However, buy-to-let properties you never lived in cannot qualify.

"How long do I need to have lived in a property for it to count as my main residence?" There is no minimum time requirement. A property counts as your main residence if you lived in it as your home at any point while you owned it. Even if you've since moved or downsized, that property may still qualify for inheritance tax relief through downsizing provisions.

"Can unmarried couples both claim the main residence nil-rate band?" No, unmarried couples and cohabiting partners cannot transfer unused main residence nil-rate band allowances between each other. This benefit is only available to married couples and civil partners. Each unmarried partner has their own £175,000 allowance (2025-26) but cannot combine or transfer it.

Common Misconceptions

Myth: I need to have lived in my home for at least 5 years for it to qualify as my main residence

Reality: There is no minimum ownership or occupancy period. HMRC explicitly states that a property qualifies as your residence if you lived in it as your home at any point while it was in your estate, even if only briefly. The key requirement is that you actually lived there—not how long you lived there.

Myth: Any property I own counts as a main residence for inheritance tax purposes

Reality: Only properties you have actually lived in as your home qualify for the residence nil-rate band. Buy-to-let properties, investment properties, or holiday homes you purchased purely as investments and never occupied cannot qualify as your main residence, regardless of their value or how long you've owned them.

  • Residence Nil-Rate Band: The £175,000 additional inheritance tax allowance that applies when you leave your main residence to direct descendants.
  • Second Home: Additional property you own that may qualify as your main residence if you lived in it, though only one property can receive RNRB benefits.
  • Property Ownership: How you hold property (joint tenants or tenants in common) affects how your main residence passes to beneficiaries and RNRB claims.
  • Inheritance Tax: The broader tax framework where main residence planning provides one of the most valuable tax-saving opportunities for families.
  • Downsizing: Protective provisions that preserve your residence nil-rate band when you move to a smaller home or care facility after 8 July 2015.

Need Help with Your Will?

Protecting your main residence with the residence nil-rate band is one of the most valuable tax-saving opportunities in estate planning. Understanding which property qualifies and ensuring it passes to your children or grandchildren can save your family up to £70,000 in inheritance tax—or £140,000 for married couples.

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Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.