If the estate is small and qualifies as an ‘excepted estate,’ you will not need to fill in a full Inheritance Tax Account.
Instead, you will need to complete a simple Return of Estate Information detailing the assets and liabilities of the estate which you will submit directly to the probate registry and not to HM Revenue & Customs.
Types of excepted estate
Low value estates
Low value estates are those estates which are valued at under the current Inheritance Tax threshold of £325,000.
Exempt estates are those estates which are valued at under £1m and everything (or at least everything above the Inheritance Tax threshold of £325,000) has been left to the deceased person’s spouse or civil partner provided they are living in the UK. The same rule applies to a charity.
Estates where the deceased was domiciled aboard
These are estates where the deceased person was domiciled abroad at the time of death and the value of their UK assets is under £150,000.
Estates with unused inheritance tax
Estates of people who died on or after 6th April, 2010, will also be treated as excepted estates if their value is less than twice the Inheritance Tax threshold and ‘100% of the unused Inheritance Tax threshold from a late spouse or civil partner can be transferred to the deceased.’
Exceptions where estates will not be treated as excepted estates
There are a number of situations where an estate will not be treated as an excepted estate even though there is no Inheritance Tax liability. In these cases you will need to complete a full Inheritance Tax Account.
For full details of these exceptions you should visit HM Revenue & Customs website by clicking here.
If you are concerned whether or not an estate is an excepted estate you should consider seeking professional advice.
One good starting point is to speak to HM Revenue & Customs on their helpline; 0300 123 1072.
Please note that information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.