Excepted Estates UK: When You Do Not Need to Complete IHT400 (2026)
An excepted estate means no full IHT400 is required — the estate is clearly not liable to IHT. Since January 2022 (SI 2021/1167), the rules were extended and the IHT205 form abolished. Three categories: low-value (under the NRB), exempt (everything to spouse or charity, under £3m), and specified (reliefs eliminate IHT, under £1m).
| Category | Conditions | IHT400? | Form / Process |
|---|---|---|---|
| Low-value estate — single person | UK domicile; gross estate ≤ NRB (£325,000); no IHT due | Not required | HMCTS Probate Service online (England/Wales); C1+C5 (Scotland) |
| Low-value estate — widowed person (full tNRB available) | UK domicile; gross estate ≤ 2 × NRB (£650,000); first spouse's full NRB unused; claim IHT402 | Not required | HMCTS Probate Service online |
| Low-value estate — widowed with RNRB | UK domicile; gross estate ≤ NRB + available RNRB + transferred RNRBs (potentially up to £1m); home to direct descendants | Not required if within revised excepted estate limit | HMCTS Probate Service online |
| Exempt estate — whole estate to spouse/CP or charity | UK domicile; gross estate ≤ £3,000,000; all passes to spouse/CP (s18 IHTA) or qualifying charity (s23 IHTA) | Not required | HMCTS Probate Service online |
| Specified estate — reliefs cover IHT | UK domicile; gross estate ≤ £1,000,000; net IHT = £0 after applying reliefs (BPR, APR, etc.) and exemptions | Not required | HMCTS Probate Service online |
| Estate NOT meeting excepted conditions | Gross estate above the relevant limit; IHT due; or conditions not met | REQUIRED — IHT400 + supplementary schedules | IHT400 submitted to HMRC; IHT421 clearance for probate |
Excepted estates: Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (SI 2004/2543), as amended by SI 2021/1167 (effective 1 January 2022 for deaths on or after that date). IHT205: abolished for England/Wales from 1 January 2022 — now HMCTS Probate Service online. Scotland: C1 form + C5 supplement. Low-value: gross estate ≤ NRB £325,000; or ≤ £650,000 if widowed + full transferred NRB (claim IHT402 on IHT400 if needed). Exempt: gross ≤ £3,000,000; all to spouse/CP (s18 IHTA 1984) or charity (s23 IHTA 1984). Specified: gross ≤ £1,000,000; net IHT = nil after reliefs/exemptions (BPR, APR, spousal, charity). HMRC enquiry: 60 days from grant of probate. IHT400 process: IHT422 reference → IHT400 + schedules → IHT payment → IHT421 → probate. IHT payment deadline: s226 IHTA 1984 (6 months from month of death). Direct Payment Scheme: IHT423.
Excepted Estates: Complete Guide
What is an excepted estate and why does it matter?
An excepted estate is an estate where, based on the estate's value and circumstances, it is clear that no IHT is due and the full IHT400 account (the comprehensive HMRC IHT return) is not required. For excepted estates, personal representatives are not required to submit an IHT400 — instead, they provide a simplified declaration to HMRC (for England and Wales, through the HMCTS online Probate Service when applying for the Grant of Probate). The excepted estate rules are set out in the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (SI 2004/2543), as significantly amended by SI 2021/1167 (effective 1 January 2022 for deaths on or after that date). The January 2022 changes were substantial: (1) the IHT205 form was abolished for deaths in England and Wales (it was incorporated into the online HMCTS Probate Service application); (2) the excepted estate limits were significantly extended; (3) a new 'specified estate' category was created for larger estates with exemptions and reliefs; (4) the gross estate limit for exempt estates (wholly to spouse/CP or charity) was raised to £3 million. Why this matters: if the estate qualifies as excepted, the process is significantly faster — no IHT400, no HMRC IHT reference number required, no waiting for HMRC to process an account. Grant of Probate can be obtained more quickly. If the estate does NOT qualify, the IHT400 process adds weeks and requires HMRC to issue the IHT421 (authority to release the grant of probate) — and IHT must be paid first.
Low-value excepted estates — the most common category
The low-value excepted estate category applies where the UK estate is below the applicable IHT threshold. Category 1 — Single person (no transferred NRB available): gross estate ≤ £325,000 (the NRB). The estate must be below the NRB threshold — no IHT due; no IHT400 required. Category 2 — Widowed person with full transferred NRB: gross estate ≤ £650,000 (2 × NRB). The first spouse's NRB must have been unused in full (the first spouse left everything to the survivor under the spousal exemption). Evidence: the first spouse's will, probate grant, and valuation at the first death date must be available. The claim for the transferred NRB (form IHT402) is not submitted separately in an excepted estate — instead, the personal representatives record that the NRB is transferable in the probate application. Category 3 — Estate benefiting from RNRB (widowed with RNRB): from January 2022, the excepted estate threshold can incorporate the available RNRB where the home passes to direct descendants. This potentially extends the excepted estate limit to up to £1 million for a surviving spouse with a full transferred NRB and full transferred RNRB. Practical note: the 'gross estate' for excepted estate purposes includes all UK assets (before deducting debts) but may exclude certain foreign assets (if the estate is UK domiciled). Certain types of assets (trust assets, gifts with reservation) count toward the gross estate — check all components before concluding the estate is excepted.
Exempt excepted estates — everything to spouse or charity
The exempt excepted estate category applies where the gross estate is £3 million or less and the entire estate passes to the deceased's spouse or civil partner (s18 IHTA 1984 — unlimited spousal exemption) or to qualifying charities (s23 IHTA 1984). This covers the most common scenario on first death in a married couple — the first spouse leaves everything to the survivor, and the gross estate is under £3 million. Key conditions: (1) UK domicile: the deceased must have been UK domiciled at death; (2) Gross estate ≤ £3 million: if the estate exceeds £3 million, the IHT400 is required even if everything passes to the spouse (HMRC requires the full account above this value); (3) Everything to spouse/CP or charity: if there is ANY bequest or gift to a non-exempt beneficiary (e.g. a £5,000 legacy to a sibling, or gifts to children under the will), the estate does NOT qualify as an exempt excepted estate and the IHT400 may be needed (depending on the value and whether another excepted estate category applies); (4) No trust assets, gifts with reservation, or pension funds (from 2027) that do not pass to the spouse. From April 2027 (pension IHT reform): DC pension funds will enter the IHT estate. If a pension fund is included in the estate above the threshold, the estate will need the IHT400 even if everything else goes to the spouse.
Specified excepted estates — larger estates with reliefs
The 'specified excepted estate' category was introduced by SI 2021/1167 (from January 2022) to simplify larger estates where IHT is eliminated by available reliefs and exemptions. Conditions: (1) UK domicile; (2) Gross estate ≤ £1 million; (3) The net IHT = £0 after applying all available reliefs and exemptions: spousal exemption (s18 IHTA); BPR 100% (ss103-114 IHTA); APR 100% (ss115-124 IHTA); charitable exemption (s23 IHTA); any other reliefs. This category commonly applies to: farming estates where APR eliminates all IHT (gross farm value up to £1 million, before the April 2026 £1m BPR/APR cap change — above £1m gross, the IHT400 is needed); business owners' estates where BPR on the business eliminates all IHT; estates with large spousal/charity legacies reducing the chargeable estate to nil. Note from April 2026: the £1m combined BPR/APR cap means farm and business estates above £1m may have residual IHT above the cap. Such estates will need the IHT400. HMRC enquiry window: even for excepted estates, HMRC retains the right to open an enquiry within 60 days of the grant of probate being issued. If HMRC enquires, further documentation will be required. After the 60-day window, the estate is generally treated as settled.
When the IHT400 is required — and the process
If the estate does not meet any of the excepted estate categories, the full IHT400 (Inheritance Tax Account) must be submitted to HMRC before a Grant of Probate can be obtained. The IHT400 process: (1) Obtain an IHT reference number from HMRC (allow 3+ weeks; apply online or via form IHT422); (2) Complete IHT400 and relevant supplementary schedules (IHT401 for jointly owned property; IHT402 for transferred NRB; IHT403 for gifts; IHT404 for jointly owned assets; IHT405 for houses/buildings; IHT406 for bank accounts; IHT407 for business interests; IHT408 for listed investments; IHT409 for pensions; IHT410 for life assurance; IHT411 for household goods; IHT413 for foreign assets; IHT417 for overseas property; IHT436 for transferred RNRB); (3) Pay any IHT due within 6 months of the month of death (s226 IHTA 1984) — Direct Payment Scheme (IHT423) for bank accounts; instalment option (ss227-229 IHTA) for property and qualifying assets; (4) HMRC issues the IHT421 (authority to issue the grant of probate) — then apply to HMCTS for the Grant of Probate; (5) Obtain clearance letter from HMRC before distributing the estate. Timeline: IHT400 process typically takes 8-16 weeks. Start early — delays in obtaining IHT clearance delay probate and delay distribution to beneficiaries.
Frequently Asked Questions
What is an excepted estate and do I need to complete IHT400?
An excepted estate is one where no IHT is due and the full IHT400 form is not required — under the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (SI 2004/2543, as amended by SI 2021/1167 from 1 January 2022). Three categories: (1) Low-value: gross estate ≤ NRB (£325,000); or ≤ 2 × NRB (£650,000) if widowed with full transferred NRB; (2) Exempt: gross estate ≤ £3m; all passes to spouse/CP or charity; (3) Specified: gross estate ≤ £1m; net IHT = nil after reliefs. If the estate qualifies as excepted, information is provided through the HMCTS online Probate Service (not a separate IHT205 — that was abolished for England and Wales from January 2022). If not excepted: IHT400 required.
Is the IHT205 still used?
No — the IHT205 was abolished for deaths in England and Wales occurring on or after 1 January 2022 (SI 2021/1167). For excepted estates, the relevant information is now provided through the HMCTS online Probate Service application. For Scotland: the C1 form (with C5 supplement) is still used. For deaths in England and Wales before 1 January 2022: IHT205 was the correct form. If you are dealing with a death after 1 January 2022, do not complete an IHT205 — use the HMCTS online Probate Service.
What is the excepted estate limit in 2026?
For UK-domiciled persons in 2026/27: (1) Low-value: gross estate ≤ £325,000 (NRB) for single persons; or ≤ £650,000 for widowed persons with a full transferred NRB available; (2) Exempt estates (whole estate to spouse/CP or charity): gross estate ≤ £3,000,000; (3) Specified estates (reliefs eliminate IHT): gross estate ≤ £1,000,000. If the estate includes the RNRB (home passes to direct descendants), the effective excepted estate threshold can be higher — up to £1 million for a single person (NRB + RNRB) or up to £2 million for widowed persons (NRBs + RNRBs). The NRB is frozen at £325,000 until at least April 2030.
Can HMRC investigate an excepted estate?
Yes — HMRC has the right to open an enquiry into any excepted estate within 60 days of the grant of probate being issued. During an enquiry, HMRC may request full documentation of the estate assets and values. If HMRC does not open an enquiry within 60 days, the estate is generally treated as settled and no further IHT is due (subject to HMRC's power to investigate fraud or material misrepresentation). Personal representatives remain personally liable for correct IHT — if the estate is undervalued or exempt estate conditions are not met, HMRC can pursue the personal representatives for any unpaid IHT (plus interest and penalties).
Does an excepted estate still need a Grant of Probate?
Excepted estate status means no IHT400 is required — it does not affect whether a Grant of Probate is needed. Whether probate is required depends on the estate's assets: bank accounts over the bank's threshold, property registered at the Land Registry, and most investments over a certain value require probate regardless of IHT status. For excepted estates in England and Wales, the excepted estate declaration is made within the HMCTS online Probate Service application — you apply for probate and declare the excepted estate status at the same time. For excepted estates with no assets requiring probate (e.g. small bank accounts, personal possessions only), no probate or IHT account may be needed.
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