What Is an Excepted Estate? (And Do You Need an IHT400?)

An excepted estate is an estate that does not need a full Inheritance Tax account on form IHT400. For deaths on or after 1 January 2022 you simply certify the values on the probate application itself, and send nothing separate to HMRC first. HMRC recognises three categories of excepted estate: low value estates, exempt estates, and estates of people who were not long-term UK resident.

Getting this right early matters more than almost anything else in a probate application, because it determines the whole route. Excepted means you apply for probate directly. Not excepted means IHT400 first, pay any tax, wait for an HMRC code, and only then apply.

This guide covers England and Wales. All figures are those in HMRC's Inheritance Tax Manual as at 17 September 2026. The rules that apply are those in force at the date of death, not today.

This guide sets out every condition in full. Whether this estate meets them depends on its own figures, and getting that wrong sends the application down the wrong route entirely — the four answers, with the rule and source behind each.

Why the term exists

Most estates owe no Inheritance Tax. Requiring a full account for every one of them would be an enormous amount of work for HMRC and for bereaved families, to collect nothing.

So the regulations "except" certain estates from the duty to deliver an account. The estate is not exempt from tax as such; it is excused the full reporting. HMRC's manual puts the change in context: before 6 April 2004 there was a flat monetary limit, and since then the limit has been linked to the Inheritance Tax nil rate band.

The three categories

1. Low value excepted estates

This is the common one. The conditions, from HMRC's manual, are that the person died on or after 6 April 2004, and:

• for deaths on or after 6 April 2025, they were a long-term UK resident immediately before death (for deaths before 5 April 2025, the test was UK domicile), and
• the gross value of the estate, including their share of any jointly owned assets, any specified transfers and any specified exempt transfers, does not exceed the Inheritance Tax nil rate band

The nil rate band is £325,000.

For deaths on or after 1 January 2022, these additional conditions apply:

• if the estate includes assets held in trust, they are in a single trust with a gross value not exceeding £250,000
• if the estate includes foreign assets, their gross value does not exceed £100,000
• if there are any specified transfers, their chargeable value does not exceed £250,000
• the person had not made a gift with reservation of benefit

2. Exempt excepted estates

This covers the larger estate where nearly everything passes to a spouse, civil partner or charity, so little or nothing is chargeable. The conditions are:

• death on or after 6 April 2004, and long-term UK resident (or UK domiciled, before 5 April 2025), and
• the gross value does not exceed £3,000,000 for deaths on or after 1 January 2022 (it was £1,000,000 before that), and
• the net chargeable value, after deducting allowable liabilities and spouse, civil partner and/or charity exemption only, does not exceed the nil rate band

Plus, for deaths on or after 1 January 2022:

• assets in trust: single trust, gross value not over £1,000,000, net chargeable value after spouse/civil partner and/or charity exemption not over £250,000
• foreign assets: gross value not over £100,000
• specified transfers: chargeable value not over £250,000
• no gift with reservation of benefit

Two restrictions HMRC flags specifically:

• Only spouse, civil partner and charity exemption can be deducted. No other exemption or relief counts towards the excepted test. Business Relief and Agricultural Relief are ignored here.
• The exemption must be greater than nil where death is on or after 1 March 2011. You cannot use this category if nothing actually passes to an exempt beneficiary.
• Charity exemption only counts for an absolute gift to the organisation.

Spouse or civil partner exemption can only be deducted if both spouses or civil partners have always been long-term UK resident (for times on or after 6 April 2025), or domiciled in the UK (before that date).

3. Not long-term UK resident

For deaths on or after 6 April 2025, a separate category covers individuals who were not long-term UK resident. Before 5 April 2025 the equivalent category was for foreign domiciliaries. If this might apply, get advice: residence and domicile questions are not a do-it-yourself area.

The limits at a glance

For deaths on or after 1 January 2022:

Test	Low value	Exempt
Gross value of estate	Not over £325,000 (the nil rate band)	Not over £3,000,000
Net chargeable value	n/a	Not over the nil rate band
Foreign assets (gross)	Not over £100,000	Not over £100,000
Specified transfers (chargeable value)	Not over £250,000	Not over £250,000
Assets in trust	Single trust, not over £250,000	Single trust, gross not over £1,000,000; net chargeable not over £250,000
Gift with reservation of benefit	Not permitted	Not permitted

The details that catch people out

The nil rate band can be doubled

Since 6 April 2010, "nil rate band" for excepted-estate purposes can mean a single nil rate band, or up to double it where the transferable nil rate band from a predeceased spouse or civil partner is available and the conditions are met. That is what lets a widow's or widower's estate of, say, £600,000 still qualify as a low value excepted estate.

The date-of-death band applies, with one quirk

The nil rate band that matters is the one in force at the date of death. There is one exception in HMRC's manual: where the person died after 5 April but before 6 August in a year, and the grant is applied for before 6 August, the band from the previous tax year applies.

Specified transfers are narrower than "gifts"

A specified transfer is a chargeable lifetime transfer where the value transferred was wholly cash, quoted shares or securities, land (with furnishings and contents enjoyed with it), or household and personal goods.

The consequence: an estate with chargeable transfers in the 7 years before death that are not specified transfers cannot qualify as an excepted estate at all. A lifetime gift of unquoted company shares, or a transfer into a trust, will take the estate outside the regime regardless of value.

When valuing specified transfers, only four lifetime exemptions may be deducted: small gifts, annual exemption, marriage or civil partnership exemption, and normal expenditure out of income. Agricultural and business relief must be ignored.

There is a trap in normal expenditure out of income: with effect from 1 March 2011 it is limited to £3,000 per tax year for these purposes. If the exemption claimed exceeds £3,000, the whole gift is treated as a chargeable transfer and counts towards the limit.

Gifts with reservation of benefit disqualify outright

A gift with reservation is one the person gave away but continued to benefit from: the classic case is giving the house to the children and carrying on living in it rent-free.

There is no threshold here. A gift with reservation disqualifies the estate from being excepted, full stop. It is also a genuinely difficult area, and if you think one exists, this is the point to speak to a solicitor or a STEP practitioner.

IHT205 is gone

If you find guidance telling you to fill in an IHT205, check its date. That short form was abolished for deaths on or after 1 January 2022. Excepted estate values are now certified directly on PA1P or PA1A, or in the online probate service.

You will still encounter IHT205 in older articles, in library books, and occasionally in advice from someone who last did this in 2019. For a death on or after 1 January 2022 there is no separate HMRC form for an excepted estate.

For deaths on or before 31 December 2021, the older rules and the older thresholds apply, and both PA1P and PA1A contain a separate section for them.

This is the fork the whole application turns on, and it is decided by the numbers rather than chosen. An estate that is excepted goes straight to the probate application; one that is not must go to HMRC first. Which side of that line this estate falls on, and what each side involves.

If the estate is not excepted

Then the route is:

1. Complete form IHT400 and the relevant schedules (IHT402 for a transferred nil rate band, IHT403 for gifts, IHT404 for jointly owned assets, IHT405 for property, IHT406 for bank accounts, and so on).
2. Report the value within 12 months. GOV.UK: if the estate owes Inheritance Tax you must report its value within one year using IHT400, and you cannot apply for probate until you have.
3. Start paying the tax. It is due by the end of the sixth month after the death, and HMRC charges interest after that.
4. Wait for HMRC's code. They send a letter with a unique code you need for the probate application.
5. Then apply for probate, quoting the code.

The IHT400 is a substantially harder document than the probate form, and the circular problem of needing to pay tax before you have the grant that releases the money is real. If you are in IHT400 territory, seriously consider professional help.

A practical way to work it out

Go through in this order. A "no" at steps 1 to 3 stops the analysis.

1. Was there a gift with reservation of benefit? If yes, not excepted.
2. Were there chargeable transfers in the last 7 years that were not specified transfers? If yes, not excepted.
3. Are there assets in more than one trust? If yes, not excepted.
4. Add up the gross value, including their share of jointly owned assets, specified transfers and specified exempt transfers.
5. Is that under the nil rate band available (single, or doubled if a transferable band applies)? If yes, likely a low value excepted estate.
6. If not, does nearly everything pass to a spouse, civil partner or charity, is the gross under £3,000,000, and is the net chargeable value under the nil rate band? If yes, likely an exempt excepted estate.
7. Check the sub-limits: foreign assets under £100,000, specified transfers under £250,000, trust assets within limits.
8. If none of the above fits, it is an IHT400 estate.

Frequently asked questions

What is an excepted estate?

An excepted estate is an estate that does not require a full Inheritance Tax account on form IHT400. For deaths on or after 1 January 2022 the values are self-certified on the probate application itself. HMRC recognises three categories: low value estates, exempt estates, and estates of people who were not long-term UK resident.

What is the limit for a low value excepted estate?

The gross value of the estate, including the deceased's share of jointly owned assets and any specified transfers, must not exceed the Inheritance Tax nil rate band, which is £325,000. The nil rate band that applies is the one in force at the date of death, and it can be doubled where a transferable nil rate band is available.

What is the limit for an exempt excepted estate?

For deaths on or after 1 January 2022 the gross value must not exceed £3,000,000, and the net chargeable value after deducting liabilities and spouse, civil partner or charity exemption must not exceed the nil rate band. For deaths before that date the gross limit was £1,000,000.

Do I still need to fill in an IHT205?

No. The IHT205 short form was abolished for deaths on or after 1 January 2022. Excepted estate values are now self-certified directly on the probate application, PA1P or PA1A, or in the online probate service. IHT205 may still appear in older guidance written before the change.

What disqualifies an estate from being excepted?

A gift with reservation of benefit disqualifies an estate outright. So does exceeding the limits on foreign assets of £100,000, specified transfers of £250,000, or assets in trust. Chargeable transfers in the 7 years before death that are not specified transfers also prevent an estate qualifying.

What are specified transfers?

Specified transfers are chargeable lifetime transfers where the value transferred was wholly cash, quoted shares or securities, land, or household and personal goods. For deaths on or after 1 January 2022 their chargeable value must not exceed £250,000 for the estate to qualify as excepted.

Does an excepted estate mean no Inheritance Tax to pay?

In practice yes, because the excepted conditions are built around the estate falling within the nil rate band or being covered by spouse, civil partner or charity exemption. But excepted status is about the reporting route, not the tax itself: it means no full account is required.

What happens if the estate is not excepted?

You must submit a full IHT400 account to HMRC, start paying any tax due, and wait for HMRC to send you a unique code before you can apply for probate. GOV.UK states you must report the value within one year and cannot apply for probate until you have done so.

You now have the excepted-estate test in full, including the conditions that catch people out. Applying it to a real estate, and then filling in whichever forms follow, is the part that takes the time. Here is what this estate needs and what help with it would cost.

Sources

Checked 17 September 2026:

• HMRC, IHTM06011 — what is an excepted estate — the three categories, nil rate band linkage, the 6 April to 6 August quirk, doubling via TNRB
• HMRC, IHTM06012 — low value excepted estates — conditions and sub-limits
• HMRC, IHTM06013 — exempt excepted estates — £3,000,000 gross limit, trust and foreign asset limits, exemption restrictions
• HMRC, IHTM06018 — specified transfers — definition, the £250,000 limit from 1 January 2022, the £3,000 normal expenditure cap
• GOV.UK, How Inheritance Tax works — the £325,000 nil rate band and 40% rate
• GOV.UK, Applying for probate — reporting within one year, cannot apply until reported
• GOV.UK, Pay your Inheritance Tax bill — the six-month payment deadline

This guide explains the rules in general. It is not advice about a particular estate, and the excepted-estate tests turn on details that are easy to get wrong. Where an estate is near a limit, or involves trusts, gifts or business assets, take professional advice.

Related guides

• IHT205 or IHT400? Which Inheritance Tax form you actually need
• PA1P or PA1A: which probate form do you need?
• How to apply for probate without a solicitor
• How long does probate take?
• How to value an estate for probate
• How much does probate cost in the UK?