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The residence nil rate band (RNRB) is subject to tapering where the estate of the deceased before reliefs and exemptions exceeds £2m. In such cases the additional nil rate amount is reduced by £1 for every £2 of the excess over £2m (the 'taper threshold'). This test includes assets which are considered part of the estate for IHT (such as GWR assets and QIIPs) but ignores assets cumulated with the death estate, such as failed PETs. This means that a lifetime gift of assets within seven years of death could be effective for reducing the estate below £2m and thus enabling the RNRB to be claimed.

Any unused excess of the RNRB amount on the death of one spouse or civil partner is available to transfer to the surviving spouse or civil partner, and this brought-forward allowance plus the residential enhancement is defined as the 'default allowance'.

Where the tapering provision applies, the default amount is reduced by the taper to give an 'adjusted allowance'. The adjusted allowance is nil if the tapering calculation reduces the default