I think the problem is that the RNRB does not relieve or exempt specific property such as the deceased’s home. Although you have to take into account the value of the deceased’s residential property interest and what value is closely inherited when doing the RNRB calculation, it is applied against the estate as a whole.
Mary Ambrose
Thomson Reuters (Practical Law)
As Mary points out the quantum of the RNRB although based on property left to lineal descendants is not deducted therefrom (ie not deducted specifically against the property). It is simply deducted in calculating the aggregate IHT levied on the chargeable estate.
The RNRB is utilised before either the individual’s NRB or any transferable NRB.