Most UK estates that owe no Inheritance Tax no longer need to complete the full IHT400 account. This guide explains what makes an estate "excepted", when the full IHT400 and its schedules are still required, and how reporting fits into the probate process.
An excepted estate is one that, based on its value and circumstances, does not need the personal representatives to submit the full Inheritance Tax account (form IHT400) to HMRC. This was designed to reduce paperwork for the large majority of UK estates that owe little or no Inheritance Tax, letting them apply for probate with a simpler process instead.
The Three Categories
Low value excepted estates: the gross value of the estate (plus any chargeable lifetime gifts) is below the available nil rate band — £325,000, or up to £650,000 where a full transferable nil rate band from a late spouse or civil partner applies
Exempt excepted estates: the gross value is below £3 million and, after deducting spouse/civil partner and charity exemptions, no Inheritance Tax is due
Foreign domiciliaries: the deceased was domiciled outside the UK and their UK assets (excluding certain excluded property) are below £150,000
How Excepted Estates Are Reported
Since reforms effective from January 2022, most excepted estates no longer file a separate IHT205 form. Instead, the personal representatives provide the necessary estate value information directly as part of the standard probate application (via the online or paper probate process, or the equivalent confirmation process in Scotland), significantly reducing the paperwork compared with the previous system.
When You Need the Full IHT400
If an estate does not meet any of the excepted estate categories, the personal representatives must complete the full IHT400 account and submit it to HMRC, along with any relevant supplementary schedules — for example, covering trusts the deceased had an interest in, lifetime gifts, agricultural or business property relief claims, pensions, or assets held abroad. The IHT400 must generally be submitted, and any tax due paid or arranged, before HMRC will confirm the position needed to obtain a grant of probate.
Paying Any Tax Due
Inheritance Tax is generally due within six months of the end of the month in which the death occurred, regardless of how long probate itself takes to finalise. If tax remains unpaid after this deadline, interest accrues. Personal representatives can often use the Direct Payment Scheme to pay tax directly from the deceased's bank or building society accounts before probate is granted, which can help meet the deadline when the estate itself is not yet accessible to the executors.
Getting It Wrong Later
Excepted estate status depends on an accurate valuation at the time. If HMRC later discovers that an estate did not in fact qualify as excepted — because an asset was undervalued, a lifetime gift was omitted, or other information changes the picture — the personal representatives can be asked to submit a full IHT400 retrospectively, and may face additional tax, interest, or penalties. Careful, honest valuation from the outset avoids this risk.
An excepted estate is one that does not need a full Inheritance Tax account (form IHT400) to be sent to HMRC because it clearly falls below the reporting thresholds or otherwise meets set conditions, simplifying the probate process for many smaller or straightforward estates.
What are the main categories of excepted estate?
The three broad categories are: low value excepted estates (gross value below the nil rate band, or below double the nil rate band for some surviving spouses/civil partners using the transferable nil rate band); exempt excepted estates (gross value below £3 million where most or all of the estate passes to a spouse, civil partner, or charity); and estates of people who were domiciled outside the UK and whose UK assets are limited.
How do I report an excepted estate?
Since reforms that took effect from January 2022, most excepted estates report the required Inheritance Tax information as part of the standard probate application (or the equivalent process for a Scottish confirmation), rather than filing a separate IHT205 or IHT400 form.
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When do I need to complete the full IHT400?
The full IHT400 account, together with any relevant supplementary schedules (for example, for trusts, gifts, agricultural or business relief, or foreign assets), is needed whenever the estate does not meet the excepted estate conditions — commonly because it exceeds the value thresholds, includes complex assets, or Inheritance Tax is actually due.
Do I still need to value the estate accurately if it is excepted?
Yes. Even excepted estates must be valued carefully, because if HMRC later finds the estate did not actually qualify as excepted (for example, an asset was undervalued or a gift was missed), the personal representatives can still be required to submit a full IHT400 and may face penalties or interest.
When must any Inheritance Tax be paid?
Inheritance Tax is generally due within six months of the end of the month in which the death occurred. Interest starts accruing on unpaid tax after this deadline even if probate itself takes longer, so personal representatives often need to arrange payment (for example, from estate bank funds via the Direct Payment Scheme) before probate is granted.
Does an excepted estate mean no Inheritance Tax is due?
Not necessarily. An exempt excepted estate can still be a large estate — it is excepted because the taxable amount is nil or minimal due to spouse/civil partner or charity exemptions, not because the estate is small. A low value excepted estate, by contrast, is below the nil rate band threshold itself.
Should I get professional help with an excepted estate?
Many straightforward excepted estates are handled without a solicitor, especially where there is a clear will and few assets. However, if there is any uncertainty about lifetime gifts, trusts, business or agricultural assets, or foreign property, taking advice before applying for probate can avoid having to reopen the process later.
Do these rules apply if the death happened before January 2022?
No. Deaths before 1 January 2022 still generally follow the older process, which could involve a separate IHT205 (and sometimes IHT217 for a transferable nil rate band claim) rather than reporting excepted estate figures directly through the probate application. This guide covers the current process used for deaths on or after that date.
How long does probate usually take for an excepted estate?
Because excepted estates skip the full IHT400 account, they typically move through probate faster than estates needing the full account, though timescales still depend on court and registry processing volumes and how complete the application is. Gathering accurate asset values and documents before applying helps avoid delays.
Disclaimer: Probate and Inheritance Tax reporting rules can change; check the current position at gov.uk. This guide is general information, not legal or tax advice. Always seek independent professional advice for your specific situation.
