Key facts
- Excepted estates do not need a full IHT400 form — IHT details are included in the probate application.
- There are three categories: low-value estates, exempt estates (spouse/charity), and foreign domicile estates.
- Since January 2022, the thresholds were significantly increased, meaning more estates qualify as excepted.
- For a low-value estate, the gross value must not exceed the NRB (including any transferable NRB).
- For an exempt estate, the gross value can be up to £3 million if the excess passes to a spouse or charity.
What Is an Excepted Estate?
An excepted estate is one that meets specific conditions set out in the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations. For these estates, the personal representatives do not need to submit a full IHT400 form to HMRC. Instead, IHT information is included directly in the probate application.[1]
Since January 2022, the excepted estate rules have been significantly simplified, meaning that the vast majority of UK estates (around 90%) now qualify for this streamlined process.
Three Categories of Excepted Estate
There are three categories of excepted estate:[2]
1. Low-Value Excepted Estates
The most common category. The conditions are:
- The gross value does not exceed the available nil-rate band (up to £650,000 if a transferable NRB from a predeceased spouse is available)
- The deceased was UK-domiciled throughout
- Foreign assets do not exceed £100,000
- The estate does not include settled property (with limited exceptions)
- Specified lifetime transfers do not exceed £250,000
2. Exempt Excepted Estates
For larger estates where the excess passes to exempt beneficiaries:
- The gross value does not exceed £3 million
- The net chargeable estate (after spouse/civil partner and charity exemptions) is within the available nil-rate band
- The excess above the NRB passes wholly to a surviving spouse/civil partner or to charity
- The deceased was UK-domiciled
3. Foreign-Domicile Excepted Estates
For deceased persons not domiciled in the UK:
- The deceased was never UK-domiciled
- The UK estate value does not exceed £150,000
- The estate consists only of UK assets (no settled property interests)
Key point: Even if an estate qualifies as excepted, HMRC retains the right to ask for a full IHT400 within 35 days of the grant of probate being issued. Personal representatives should keep full records in case this happens.
Excepted vs Non-Excepted Estates
| Feature | Excepted Estate | Non-Excepted Estate |
|---|---|---|
| HMRC form required | None (IHT details in probate application) | IHT400 + schedules |
| IHT payable | No | Depends on estate value |
| Maximum gross value | £650,000 (low-value) or £3m (exempt) | No limit |
| Probate timeline | Faster — no HMRC processing delay | Slower — wait for HMRC receipt |
| HMRC enquiry risk | HMRC can request IHT400 within 35 days | HMRC can enquire for up to 20 years |
The January 2022 Changes
From 1 January 2022, the excepted estate rules were substantially reformed:[3]
- The IHT205 form was abolished — excepted estate information is now part of the probate application
- The exempt estate threshold was raised to £3 million (from £1 million)
- The lifetime gift threshold was raised to £250,000
- The trust condition was relaxed to allow single trust interests up to £250,000
- The result: approximately 90% of non-taxpaying estates no longer need to complete any HMRC form
Practical tip: Even for excepted estates, it is good practice to prepare a full asset schedule as if you were completing an IHT400. This ensures accurate probate values and provides evidence if HMRC later requests a full return.
Frequently Asked Questions
What is an excepted estate?
An excepted estate is one that meets certain conditions allowing simplified IHT reporting. Instead of completing the full IHT400 form, the personal representatives include IHT information in the probate application. No tax is due on a qualifying excepted estate.
What are the conditions for a low-value excepted estate?
The gross value of the estate must not exceed the available nil-rate band (including any transferable NRB from a predeceased spouse). The estate must be wholly UK-domiciled, with specified foreign assets not exceeding £100,000. Certain trust and lifetime gift conditions also apply.
Can an estate worth more than £325,000 be excepted?
Yes. If a transferable NRB is available from a predeceased spouse, the threshold can be up to £650,000. Additionally, “exempt excepted estates” can have a gross value up to £3 million if the excess above the NRB passes to a spouse/civil partner or charity.
What changed in January 2022?
From 1 January 2022, the excepted estate rules were significantly relaxed. The IHT205 form was abolished, and IHT reporting for excepted estates moved into the probate application. The thresholds were raised and the conditions simplified, meaning around 90% of estates now qualify as excepted.
Further Reading
- The IHT400 Form — the full IHT account for non-excepted estates
- Probate and IHT Overview — how probate and IHT interact
- Transferable Nil-Rate Band — increasing the excepted estate threshold
- The Nil-Rate Band — the £325,000 threshold
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Sources
- Applying for probate — GOV.UK
- IHTM06012 – Excepted estates — HMRC
- Changes to Inheritance Tax reporting from January 2022 — GOV.UK