Excepted Estates: When You Skip the Full IHT Account

What is an excepted estate?

An excepted estate is one where no full inheritance tax account is required because it meets HMRC's conditions, usually because little or no tax is due. The person dealing with the estate declares a value rather than filing form IHT400. This applies where the estate is low in value, is largely exempt because it passes to a spouse, civil partner or charity, or belongs to someone who lived permanently abroad (gov.uk, as at July 2026, subject to change).

The three types of excepted estate

There are three broad routes into excepted-estate status: low value, exempt, and foreign domiciliary. An estate needs to meet only one of them, alongside the general conditions on gifts, trusts and foreign assets. Which route fits depends on the size of the estate and who inherits, so the same value can be excepted in one family and not in another (gov.uk, as at July 2026, subject to change).

Type	Broad test (July 2026)
Low value	Gross value below the £325,000 nil-rate band
Exempt	Worth less than £3 million, with everything above the nil-rate band passing to a spouse, civil partner or qualifying charity
Foreign domiciliary	Person lived permanently outside the UK, with UK assets of £150,000 or less

Type

Broad test (July 2026)

Low value

Gross value below the £325,000 nil-rate band

Exempt

Worth less than £3 million, with everything above the nil-rate band passing to a spouse, civil partner or qualifying charity

Foreign domiciliary

Person lived permanently outside the UK, with UK assets of £150,000 or less

Source: gov.uk, check if you need to send full details of the estate, as at July 2026 and subject to change. The £325,000 nil-rate band is fixed until the end of the 2030-31 tax year (5 April 2031) (gov.uk).

The limits that decide it

A low-value excepted estate has a gross value below the £325,000 nil-rate band. An exempt excepted estate can be larger, worth less than £3 million, provided everything above the available nil-rate band passes to a spouse, civil partner or qualifying charity (gov.uk, as at July 2026, subject to change). A separate route allows an estate worth £650,000 or less where a full unused nil-rate band is transferred from a spouse or civil partner who died first (gov.uk, as at July 2026, subject to change).

The general conditions still have to be met. Broadly, gifts in the seven years before death should not exceed £250,000, assets held in trust should not exceed £250,000 and should sit in a single trust, and foreign assets should not exceed £100,000 (gov.uk, as at July 2026, subject to change). Cross any of these and a full account is generally needed.

See our wider guide to valuing an estate for how the gross and net figures are worked out.

When a full IHT account is still needed

Even where no tax is due, some estates cannot use the excepted route and must send full details on form IHT400. This generally applies where the person gave away more than £250,000 in the seven years before death, gave gifts but kept a benefit from them, held foreign assets worth more than £100,000, held more than £250,000 in trust, or held assets in more than one trust (gov.uk, as at July 2026, subject to change). A full IHT400 account is normally sent within 12 months of the death and before applying for probate (gov.uk, as at July 2026, subject to change).

Large lifetime gifts. More than £250,000 given away in the seven years before death (gov.uk, as at July 2026, subject to change).

Gift with reservation. Assets given away but still enjoyed, such as a home lived in rent-free.

Trusts and foreign assets. More than one trust, over £250,000 in trust, or foreign assets over £100,000 (gov.uk, as at July 2026, subject to change).

A worked example (illustration only). A widower dies owning a home worth £300,000 and savings of £180,000, so £480,000 in total, and leaves everything to his two children. His late wife left everything to him, so a claim can be made to transfer her unused nil-rate band, giving up to £650,000 combined (gov.uk, as at July 2026, subject to change). He made no large gifts, held no trusts and had no foreign assets. The £480,000 estate could qualify as an excepted estate on the transferred-threshold route, with the value reported through the probate application rather than on a full IHT400 (gov.uk, as at July 2026, subject to change). Change the figures, the gifts or the beneficiaries and the answer changes, so this is general information rather than a calculation for any real estate.

Where a transferred nil-rate band is relied on, a claim is still made when the second person dies, and the paperwork records that the first spouse's band was unused (gov.uk, transferring unused threshold, as at July 2026, subject to change). Getting the type wrong can cause delay at probate, so many people choose to check the conditions carefully, and it can be worth discussing a borderline estate with a qualified professional. For the bigger picture, see our What Is Probate? guide.

Excepted estates in Scotland and Northern Ireland

Inheritance tax is a UK-wide tax, so the excepted-estate conditions, the £325,000 nil-rate band and the value limits apply across all four nations (gov.uk, as at July 2026, subject to change). What differs is the surrounding process. In Scotland the equivalent of probate is confirmation, and the estate value is reported as part of that application rather than an English grant. Northern Ireland has a separate but broadly similar system to England and Wales. Where an estate touches more than one UK nation, it can be worth taking advice in each. For the wider picture, see our estate planning guide.

Frequently asked questions

What does excepted estate mean?

An excepted estate is one that meets HMRC's conditions, so no full inheritance tax account is required. For deaths on or after 1 January 2022, the person dealing with it reports an estimated value as part of the probate application instead of sending form IHT400 (gov.uk, as at July 2026, subject to change). It usually means little or no tax is due.

What are the excepted estate limits for 2026?

A low-value excepted estate has a gross value below the £325,000 nil-rate band. An exempt excepted estate can be worth less than £3 million where everything above the nil-rate band passes to a spouse, civil partner or charity, and a foreign domiciliary route applies where UK assets are £150,000 or less (gov.uk, as at July 2026, subject to change).

Do you still fill in form IHT205?

For deaths on or after 1 January 2022, form IHT205 is no longer used. Instead, an excepted estate is reported through the probate application, where you give an estimated value even though there is no inheritance tax to pay (gov.uk, as at July 2026, subject to change). A full IHT400 is only needed where the estate does not meet the excepted conditions.

Can gifts stop an estate being excepted?

They can. Where the person gave away more than £250,000 in the seven years before death, or gave gifts but continued to benefit from them, the estate generally cannot be excepted and full details are required (gov.uk, as at July 2026, subject to change). It can be worth checking the gift history carefully before deciding which route applies.

Can a couple's transferred allowance make an estate excepted?

Often, yes. Where a spouse or civil partner died first leaving everything to the survivor, a full unused nil-rate band can be transferred, and an estate worth £650,000 or less may then qualify as excepted (gov.uk, as at July 2026, subject to change). A claim to transfer the band is still made on the second death.

Does an excepted estate still need probate?

It can. Being excepted only affects the inheritance tax reporting, not whether a grant is needed. Whether probate is required depends on the assets, such as property or larger bank balances, rather than on the excepted status itself. Even where no tax is due, you report the estate's estimated value as part of the probate application (gov.uk, as at July 2026, subject to change).

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Figures and rules are current as at July 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider your individual circumstances.