What is an excepted estate for inheritance tax reporting?
Answered 11 March 2026
Excepted Estates for Inheritance Tax Reporting
An "excepted estate" is an estate where the personal representatives are not required to deliver a full Inheritance Tax account (form IHT400) to HMRC, because the estate falls within prescribed conditions set out in regulations.
What the law says
The Board of HMRC has power under s.216 of the Inheritance Tax Act 1984 to make regulations dispensing with the requirement to deliver accounts. The principal regulations are the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 (SI 2004/2543), as amended most recently by SI 2021/1167 (effective for deaths on or after 1 January 2022).
Instead of a full account, personal representatives must produce basic information: the deceased's full name, date of death, the gross and net values of the estate for IHT, the net qualifying value, and a declaration that the estate is an excepted estate.
Once the prescribed period expires (60 days from the grant of representation for deaths on or after 1 January 2022), all persons are automatically discharged from any IHT claim on the excepted estate, unless HMRC issues a notice requiring additional information within that period. This discharge does not apply in cases of fraud or failure to disclose material facts, nor where further property is later found that takes the estate outside the excepted estate conditions.
HMRC Guidance / Practice
The Three Categories
For deaths on or after 6 April 2004, there are three categories of excepted estate:
- Low value excepted estates (IHTM06012)
- Exempt excepted estates (IHTM06013)
- Foreign domiciliaries / non-long-term UK residents (for deaths on or after 6 April 2025, individuals who are not long-term UK residents; for deaths before 5 April 2025, foreign domiciliaries)
Low Value Excepted Estates
The gross value of the estate must not exceed the IHT nil rate band (currently £325,000). With effect from 6 April 2010, this limit can be up to double the nil rate band if a valid claim for transferable nil rate band (TNRB) from a deceased spouse or civil partner is available and the relevant conditions are met.
Exempt Excepted Estates
These apply where the estate passes largely to a spouse/civil partner or charity. The conditions include:
- The gross value of the estate (including jointly owned assets, specified transfers and specified exempt transfers) does not exceed £3,000,000 (for deaths on or after 1 January 2022; £1,000,000 before that date)
- The net chargeable value after deduction of liabilities and spouse/civil partner or charity exemption only does not exceed the IHT nil rate band
- If the estate includes trust assets, their gross value does not exceed £1,000,000 and net chargeable value does not exceed £250,000
- If the estate includes foreign assets, their gross value does not exceed £100,000
- Specified transfers do not exceed £250,000 in chargeable value
- The deceased had not made a gift with reservation of benefit
Valuation
Open market value (per IHTA 1984 s.160) must be used. HMRC does not insist on a professional valuation, but personal representatives should consider one where preliminary estimates put the gross value close to the excepted estate limit. Where the gross value is likely to be less than £200,000, personal representatives may use their own realistic estimate.
Practical Consequences
- There is no requirement to complete form IHT400 for an excepted estate
- If the estate ceases to qualify as an excepted estate (e.g. because the value changes or an Instrument of Variation is executed), the personal representatives must deliver a full IHT400 within 6 months of establishing that the estate no longer qualifies
- HMRC will return correspondence about an excepted estate where no tax liability arises, and there is no need to notify HMRC of changes unless they give rise to a tax liability
Citation sources
Where the estate is an excepted estate (IHTM05021) or qualifies for small estates confirmation (IHTM05022) and is also an excepted estate (IHTM06011) there is no requirement to complete form IHT400 (IHTM10021). Instead, for deaths on or after 1 January 2022, the Personal Representatives (PRs) will only need to complete an inventory form C1 (IHTM05025), which will include declarations that the estate is an excepted estate. For deaths before 1 January 2022, a form C5 (for an excepted estate) or a
The conditions for these estates are that the deceased died on or after 6 April 2004, and for deaths on or after 6 April 2025, was a long-term UK resident immediately before their death (IHTM47000) for deaths before 5 April 2025, is domiciled (IHTM13000) in the United Kingdom, the gross value of the estate, including the deceased’s share of any jointly owned assets, any specified transfers (IHTM06018) and any specified exempt transfers (IHTM06019), does not exceed £3,000,000 for deaths on or
In determining the value of an estate to see whether or not it qualifies as an excepted estate, the regulations import the provisions of IHTA84/S160 by defining ‘value’ as meaning ‘value for tax’. This means the open market value (IHTM09703) of an asset must be used. From 15 April 2002, in England & Wales the net value of an excepted estate (IHTM06011) must be rounded up to the next whole thousand and expressed as ‘not exceeding £…’ . However, both the gross and net values for an exempt excepted
For deaths before 6 April 2010 the limit for excepted estates was the single Inheritance Tax (IHT) nil rate band available to every individual, irrespective of whether or not there was any unused nil rate band to transfer. For deaths on or after this date the limit is increased by up to double the IHT nil rate band if transferable nil rate band (TNRB) can be claimed and other conditions are met. You can find details of these conditions at IHTM06024. If TNRB is not initially claimed, and the valu
Citation, commencement, effect and interpretation 1 1 These Regulations may be cited as the Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021. 2 These Regulations shall come into force on 1st January 2022, and shall have effect in relation to deaths occurring on or after that day. 3 In these Regulations “the principal Regulations” means the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 . Amendment of the principal Regulations 2 In
nder section 8A(4) of the 1984 Act (subject to section 8A(5) and section 8C of that Act)”. 5 For regulation 6 of the principal Regulations and its heading substitute— Production of information: deceased domiciled in the United Kingdom 6 1 Subject to paragraph (3), and where the circumstances prescribed by regulation 4(2) or 4(3) apply, a person who by virtue of these Regulations is not required to deliver to the Board an account under section 216 of the 1984 Act of the property comprised in an e
For deaths on or after 6 April 2004, there are three categories of excepted estate: low value excepted estates (IHTM06012) exempt excepted estates (IHTM06013), and for deaths on or after 6 April 2025, individuals who are not long-term UK resident (IHTM47000) or, for deaths before 5 April 2025, are foreign domiciliaries (IHTM06021). Before 6 April 2004, there was a monetary limit below which an estate might qualify as an excepted estate. After this date, this ‘excepted estate limit’ was linke
Agents and personal representatives (IHTM05012) often write to us about excepted estate cases. If there is no reference on ALF and the Calendar of Grants (IHTM09310) confirms the estate was an excepted estate, you should deal with the letter as follows: where details of amendments are received but it is clear that the estate still qualifies as an excepted estate and the Inheritance Tax nil rate band is not exceeded, you should return the letter and any accompanying documents to the correspondent
ed in accordance with these Regulations, all persons shall on the expiration of the prescribed period be discharged from any claim for tax on the value transferred by the chargeable transfer made on the deceased’s death and attributable to the value of the property comprised in an excepted estate and any Inland Revenue charge for that tax shall then be extinguished. 2 Paragraph (1) shall not apply if within the prescribed period the Board issue a notice to— a the person or persons who would apar
If an estate no longer qualifies as an excepted estate, the personal representatives must deliver an account within 6 months of establishing that the estate ceased to qualify. There are three circumstances in which an estate may no longer qualify the value of the estate changes so that the chargeable estate is now more than the nil rate band, or an Instrument of Variation (IHTM35011) is executed so that the way the estate devolves changes and the estate then fails to qualify. For example, reliev