How to Complete IHT205 UK (2026): Excepted Estate Return Guide

Form IHT205 (Return of Estate Information) is the simplified inheritance tax form used for 'excepted estates' — estates where no IHT is due and the estate does not have complex elements requiring the full IHT400 account. The IHT205 was the standard form for straightforward estates for many years. However, since January 2022 (for deaths on or after 1 January 2022), most excepted estates in England and Wales no longer need to complete a separate IHT205 paper form at all. The information that was previously provided on the IHT205 is now collected as part of the online probate application at the HMCTS online probate service. The paper IHT205 still exists and is used in some circumstances (see below): (1) When the online probate service is used (most estates in England/Wales): for deaths on or after 1 January 2022, executors applying for probate online at apply-for-probate.service.gov.uk answer a series of questions about the estate's value and composition as part of the online probate application. The system determines whether the estate qualifies as an excepted estate and, if so, does not require a separate IHT form to be submitted to HMRC. The information goes directly to HMRC from the probate service; (2) When a paper application is made: if the executor applies for probate on paper (form PA1P) rather than online, they still need to complete a paper IHT205 (for excepted estates) or IHT400 (for larger estates). The paper IHT205 is submitted with the PA1P to the Probate Registry; (3) Scotland and Northern Ireland: Scotland uses form C5 (Scotland) — an entirely different form. Northern Ireland continues to use a version of the IHT205 for excepted estates. These are not covered by the England and Wales online probate process.

An estate qualifies as an 'excepted estate' (and therefore uses the IHT205 or the online equivalent rather than the full IHT400) if it meets the criteria set out in the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (as amended). For deaths on or after 1 January 2022, the criteria are: (1) Gross estate value: the gross value of the estate (before deducting debts, funeral expenses, and reliefs) must not exceed: (a) £1 million if the estate is exempt because it is passing entirely to a surviving spouse/civil partner or to charity; OR (b) £325,000 (the current nil-rate band) in other cases; OR (c) up to £650,000 if the full unused nil-rate band from a late spouse/civil partner is being transferred to the estate (transferable NRB); (2) No IHT due: the estate must not result in any IHT being payable after applying all available exemptions and reliefs; (3) No chargeable trusts: the deceased must not have been entitled to assets in a relevant trust (interest in possession) that are part of the estate; (4) No more than one trust: the deceased can have been a beneficiary of one trust, but not in a way that makes the total estate exceed the thresholds above; (5) Gifts within 7 years: there must be no chargeable transfers (CLTs to discretionary trusts) in the 7 years before death that total more than £150,000; (6) No assets outside the UK: if the deceased was domiciled in the UK, overseas assets must be below £100,000; (7) Not a settled legacy from a previous estate: the estate must not include exempt transfers that were originally part of a larger non-exempt estate; (8) Main residence: any claim for the Residence Nil-Rate Band must be made — if the RNRB applies, the total estate can be larger (up to £500,000 for a single person with RNRB, or £1 million for a couple) and still qualify as an excepted estate.

For deaths on or after 1 January 2022, the excepted estate declaration is made as part of the online probate application at apply-for-probate.service.gov.uk: (1) Start the online probate application: create a Government Gateway account (or sign in if you have one). Start a new probate application for the estate. You will need: (a) the original death certificate; (b) the original will (if there is one); (c) the deceased's National Insurance number; (d) details of all assets and their values (see below); (2) Provide asset values: the online service asks for the gross value of each category of asset: (a) property owned in England/Wales (use RICS Red Book probate valuation or agent's written estimate); (b) bank/savings accounts (contact each bank for the balance at date of death); (c) investments, stocks, shares (use the 'quarter-up' rule for quoted shares; probate value from stockbroker; ISA: bid price from provider); (d) household goods and personal belongings (typically £100–£5,000 — use reasonable estimate; insured value can guide you); (e) cars, boats, other vehicles; (f) outstanding debts owed to the deceased; (g) life insurance not in trust; (h) partnership or business interests (if applicable); (3) Provide liability information: mortgages, credit card debts, loans, other liabilities; (4) The system calculates: whether the estate falls within the excepted estate thresholds; whether any exemptions apply (spouse, charity); whether an IHT400 is needed instead; (5) If excepted: the system generates an excepted estate declaration. You proceed directly to applying for probate (PA1P). No separate IHT form is sent to HMRC — the online system handles this; (6) Probate fee: £300 for estates over £5,000; free below £5,000. Pay online as part of the application; (7) Processing: 4–8 weeks for online applications with no HMRC query.

If the estate does NOT qualify as an excepted estate, the full IHT400 account must be completed and submitted to HMRC before probate can be obtained. You must use the IHT400 when: (1) IHT is due: the estate exceeds the available nil-rate band and RNRB after all exemptions and reliefs, and there is tax to pay; (2) The estate exceeds the excepted estate thresholds: gross estate above £1 million (non-exempt estates) or above the transferable NRB ceiling; (3) There are chargeable trusts: the deceased had an interest in a relevant trust; (4) There were CLTs exceeding £150,000 in the 7 years before death; (5) There are overseas assets above £100,000; (6) The estate includes foreign domicile complications; (7) HMRC requires further information: even if the estate initially appears excepted, HMRC can raise a compliance check if they have reason to believe the estate has been undervalued. The IHT400 must then be submitted; (8) The estate is potentially subject to the residence nil-rate band (RNRB) downsizing addition and the calculation is complex. The IHT400 has 20+ supplementary schedules: IHT401 (domicile); IHT402 (transferable NRB); IHT403 (gifts); IHT404 (jointly owned assets); IHT405 (houses/land); IHT406 (bank accounts); IHT407 (household/personal goods); IHT408 (household goods sold); IHT409 (pensions); IHT410 (life insurance); IHT411 (listed shares); IHT412 (unlisted shares); IHT413–IHT420 (business/agricultural relief); IHT421 (confirmation that IHT settled — sent electronically to Probate Registry by HMRC). The IHT400 is submitted to HMRC with evidence of valuations; HMRC acknowledges and sends the IHT421 electronically to the Probate Registry after processing.

Common errors when completing the IHT205 or the online excepted estate declaration: (1) Using gross rather than net values for the threshold check: the excepted estate thresholds (£325,000 or £1 million) apply to the GROSS estate value — not net of debts. If the gross estate is £350,000 but debts bring it down to £300,000, the estate still exceeds the £325,000 gross threshold (unless a spouse or charity exemption applies). The calculation must be done in the right order; (2) Forgetting to include jointly owned assets: jointly held property passing by survivorship is typically not part of the estate for administration purposes, but it IS included in the gross estate value for IHT and excepted estate threshold calculations. Include the deceased's share of any jointly held property; (3) Incorrectly valuing property: the probate value of property must be the open market value at the date of death (not the purchase price, not an insurance rebuild value, not Zoopla/Rightmove — a written estate agent's opinion of value or a formal RICS Red Book valuation is required); (4) Missing lifetime gifts: gifts made in the 7 years before death must be declared. If the total of CLTs in those 7 years exceeds £150,000, the estate cannot be an excepted estate — even if no IHT is actually due on those gifts; (5) Forgetting pension lump sums: pension lump sums paid to the estate (as opposed to nominated beneficiaries) are part of the estate. Note: from April 2027, undrawn pension funds will be drawn into the estate for IHT purposes — significant change for many estates; (6) Assuming the estate is automatically excepted without checking: always work through the criteria systematically. The temptation to assume an estate is 'obviously below' the threshold without checking can lead to errors; (7) Not keeping a record: retain all valuations, letters from banks, and supporting documents for at least 12 years (the HMRC investigation period for IHT is 20 years in fraud cases and 6 years in other cases, but keeping records for 12 years is prudent).