Inheritance tax on death: nil-rate band and residence nil-rate band

Every estate has a nil-rate band of £325,000, taxed at 0%. On top of that, a residence nil-rate band of £175,000 is available, but only where a qualifying home passes to direct descendants — children, grandchildren, and their spouses or civil partners — not to a sibling, other relative, or anyone else, however close. Both bands can be transferred between spouses and civil partners: whatever proportion the first to die didn't use can be claimed on the second death, effectively doubling what's available. Everything above the combined total is taxed at 40%. The residence nil-rate band also tapers away on very large estates, on top of needing a qualifying home and qualifying beneficiaries — three separate conditions that are easy to conflate.