Excepted Estates – When is Probate not required?
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Probate is generally required where assets (of more than £5k) are held in the deceased’s name.
A grant of probate is the legal authority given to executors to allow them to ‘administer’ a deceased’s estate. Think of it like the ‘driving license’ – the legal authority (and only legal authority) that permits executors to do their job.
How executors obtain that grant of probate will depend on a number of factors. If an estate is deemed ‘excepted’, it provides a simpler route through to obtaining the grant of probate. However, even if excepted, there may be occasion where no grant of probate is needed come what may.
Do Executors always need Probate?
There are some exceptions where a grant of Probate may not be needed by the executors. This might include where any assets were held jointly with other people (so something called the ‘right of survivorship’) applied to the assets and they passed automatically to the surviving joint owner and irrespective of any will.
Also, the estate might be sufficiently small in value to remove the need for probate – ie banks might agree to release funds without seeing a grant of probate. They will often ask the executors to sign some sort of indemnity in these circumstances.
Who decides if Probate is needed?
Circumstance (not people) decide whether probate is needed or not. In a nutshell, where there are assets that need to be dealt with (for example in the deceased’s sole name), then probate will probably be required.
For example, banks will invariably insist on seeing a grant before they pay out the balance of a deceased’s bank account to the. So, it is at that the stage of the estate of ‘realising assets’ that decides whether probate is needed or not. Read more about realising assets in our article ‘How do Executors realise assets during Probate’
Does Probate need an Oath to be sworn?
Probate applications have come a long way, from having to swear an Oath and submit a bunch of paperwork to an online application process where the Probate Registry no longer requires wet signatures.
Get started applying for probate on the Govt website ‘Applying for Probate’
What is an Excepted Estate (where Probate is not needed)?
An estate can of course be excepted, but still need a grant of probate. As above, the assets of an estate will determine if a grant of probate is needed. And, the excepted estates provisions will simply determine which route to obtaining that grant of probate the executors of the estate need to follow,
The concept of an excepted estate is not new, though recent changes (which came into force on 1 January 2022) have streamlined the excepted estates process further. In essence, it is now even easier for probate practitioners and individuals to obtain the Grant of Probate where an estate is considered an “excepted estate”.
Although you still need to value the estate and compile information about the estate, there is no longer a requirement for a form IHT205 to be completed and submitted with your probate application.
What are the Requirements of an Excepted Estate?
An estate is deemed to be an ‘excepted estate when one or more of the following applies:-
- the value the estate is below the inheritance tax nil rate band threshold (currently £325,000);
- the estate is worth £650,000 or less and any unused threshold is being transferred from a spouse/civil partner who died first;
- the total value of the estate is below £3mil, and the deceased left everything to a non chargeable beneficiary (eg spouse/civil partner living in the UK or to a qualifying charity). This has been increased from £1 million prior to the 2022 changes – meaning that more estates now fall into the ‘excepted estates’ category
- the deceased was living permanently outside the UK when they died and the value of their UK assets is under £150,000.
If Inheritance Tax (IHT) is payable, then Probate will be required.
What is NOT an Excepted Estate?
Any estate which requires Inheritance Tax (IHT) to be paid can not, by definition, be deemed an excepted estate. A full probate application will be needed as will information need to be submitted to the Revenue, along with IHT being paid.
Technically speaking it would be possible for an estate to be liable to IHT, or otherwise NOT an excepted estate, but still not need a grant of probate to deal with the assets. This is rare, and would require (for example) something like all assets being held jointly with others (who were chargeable beneficiary for IHT purposes). This would mean the right of survivorship would apply dealing with the transfer of ownership without a grant needing to be presented.
When does an IHT form need to be submitted for Probate?
So, if an estate is NOT deemed ‘excepted’, a full IHT return will be needed, even if there’s no tax payable. Those factors taking an estate out of the excepted estates rules include:-
- the deceased my lifetime gifts over £250,000 in the 7 years before they died
- if the estate includes a trust you may need to complete a full account and you should seek legal advice
- had a life insurance policy that paid out to someone other than their spouse/civil partner,
- gave gifts then continued to benefit from them in the 7 years before they died (read more about Gifts with Reservation of Benefit)
- left an estate worth more than £3 million (irrespective of whether it passes to a chargeable or non chargeable beneficiary
- had foreign assets worth more than £100,000
- was “deemed domiciled” outside the UK
- was living permanently outside the UK when they died but had previously lived in the UK
What has changed with Probate (Excepted Estates)?
Once you’ve determined that an estate is an ‘excepted estate’ and there’s no tax to pay, you no longer need to give full details of the estate to HMRC.
The old IHT205 & IHT217 forms are now not needed, and you need to simply complete the probate application online. You still need to value the estate and compile all the information, as you will be asked to give details of the gross and net values, which then appear in the Legal Statement that the executors need to sign to make the probate application.
Read more about How to Value assets for Probate
If the estate falls outside of the excepted estate provisions, a return is still needed to be submitted to HMRC (and initial instalment IHT paid) before the Probate Registry and process the application for the grant of probate. Read more about When do you pay Inheritance Tax (IHT).
What limit is there on an Excepted Estate?
The gross estate limit for an excepted estate has also been increased from £1 million to £3 million, meaning that, if the estate is less than £3 million and no IHT is payable after applying relevant exemptions and reliefs (eg the assets pass to a spouse/civil partner or a charity) the Executors can apply for the grant using the process above and without having to submit the IHT400 to HMRC. Read more about Inheritance Tax Reliefs and Exemptions
Free Legal Guide
We hope you have found this free legal guide helpful. Do please remember that it is just that – a guide. And so, it should NOT be taken as legal advice. That said, our expert team of probate solicitors are here to help – so do reach if you need legal advice. You can email us, call, or leave a comment below. Meantime, a big thank you for visiting QLAW – the home of all things legal!
Hi Neil
So if an estate is an excepted estate and probate has been granted there is then no need to supply any further returns to HMRC regards IHT provided the status of the excepted estate remains the same – i.e. if the values increase/decrease on realisation/valuation but in aggregate below the thresholds. Correct?
So, its perhaps best to think of it in descriptive rather than named terms! If an estate is or becomes liable to IHT, then the Revenue must be notified and they will want their slice of the action! Inheritance Tax is of course a hot topic and may change in the Autumn Statement on Weds? Back to you query! The question then (whether on applying for probate or after) is what is the value of the estate? Most things can be set in stone and so do not change. So a bank balance is what it is – ie the capital balance on the date of death, plus any uncredited accrued interest. A share holding is what it is – valued at close of business on the date of death on a ‘quarter up’ basis. However, perhaps the 3 big variables that can change things post probate include houses (as the value is subjective); business values (same reason as houses); and of course lets not forget assets being found that the executors knew nothing about when probate was applied for (quite common). But the value at date of death is still key. So take for example a house, and lets assume the property market is ‘hot’ around and beyond the date of death. The probate value will be the realistic price that would be achieved at date of death. But, the house may not sell for some time after that, and prices may be rising. Whilst this may not impact the IHT value of the house (if it can be demonstrated the value at date of death was correct, the IHT value will form the ‘base cost’ for CGT purposes and therefore may give rise to a Capital Gains Tax (CGT charge) instead!
Hope this helps.
(NB – our articles and any comments thereon do not represent legal advice and should not be taken as such. If you require legal advice about your particular case, please make contact with us).
Hi Neil
Very interesting article thank you.
I just wanted to check one point re excepted estates/exempt estate…
To qualify as an excepted estate one of the conditions you mention is – the gross estate value has to be less than £3 million, the net chargeable value of the estate after spouse exemption is below the inheritance tax threshold and the entire estate passes to the surviving spouse.
This implies for the estate to qualify as exempt all the estate must go to the spouse -is this correct ?
Or is it per the HMRC IHT 400 notes on page 3 (for deaths on or after 1 January 2022) which mention …
“the gross value of the estate does not exceed £3 million and the net chargeable value of the estate after deduction of liabilities and Spouse or Civil Partner Exemption and/or Charity Exemption only does not exceed the Inheritance Tax threshold”
This indicates as long as after the spouse exemption the estate is below the IHT exempt exemption then not all the estate needs to be passed to the spouse some could go to another beneficiary and qualify as an exempt estate – is this correct?
Thank you for your help.
Thanks for a great question/comment.
Another way of looking at the point is to see it as a situation where an Inheritance Tax account (IHT400) is NOT required when applying for Probate. The rules around this changed in 2021 – most notably perhaps raising the excepted estates upper limit from £1m to £3m.
The requirement is (and was) that the estate falls below the upper limit, and (after the application of Spouse or Charitable exemptions) the net chargeable estate falls below the nil rate band (ie no IHT is payable). However, in isolation this does not in itself mean there is no requirement to submit an IHT 400 return when applying for probate. Other factors in the estate may make this necessary – eg lifetime gifts, or trust assets.
A really interesting question – for which a big thank you!
(NB – our articles and any comments thereon do not represent legal advice and should not be taken as such. If you require legal advice about your particular case, please make contact with us).
Really useful website. Just a quick question about “deemed domiciled” . Is this only relevant to people who are classed as ‘non-dom’ for income tax? My father lived permanently in the UK and paid all income tax in the UK via PAYE (He arrived in the UK in 1955 aged 19 and lived here ever since. He became a Brit Cit in 1985).
Hi, and thank you so much for reaching out. Domicile is a matter which impacts Probate and Inheritance Tax (related to but separate from income tax). Has your father passed? What in particular did you have in mind as regards his domicile -v- IHT and probate?
Just sorting out my Dads estate. He has agricultural land (so will be 100% free of IHT) as well a shares in a private limited company (100% free of IHT), total estate is way under the £3m level . Without these included in the value of his estate he will be under the £325,000 threshold. So does this mean I can just file for probate with out the need to file IHT400?
Thanks for this great question. I am of the view that HMRC guidance on this is a tad ambiguous. Having raised with HMRC a question along those lines recently, the guidance we were given is that the excepted estates thresholds (£3mil/£325k NRB etc) apply AFTER the deduction of ‘all exemptions and reliefs’, and so they did not want an IHT400. I would put a call through to their helpline to be sure! HMRC IHT contact details are here.
The more I read about excepted estates the more confused I am. My husband died in April 2023. As we had mirror wills why is a probate application needed as everything was left to me in my husband’s will so there is no IHT to pay. Why isn’t production of the will sufficient?
The only body asking for Probate is NS&I is there any way round this?
Hello and thank you for your comment. You raise a very good point, and hopefully the following will help.
Firstly, I am very sorry to hear of your husbands passing.
This article addresses two points – (1)’excepted’ estates, and also related but separate to that, (2) when is probate needed?
The excepted estates bit simply defines how you get probate. It is nothing to do with whether you need probate to realise assets (like NS&I). So, an excepted estate has a simpler procedure, which does not require the executors to submit a full ‘return’ of assets to HMRC (because no IHT is payable). Being excepted does NOT mean that probate is not needed. It simply defines how you apply for it.
Separately is the question of whether probate is needed or not. If an asset holder is insisting on seeing probate then you have little choice but to obtain probate and submit it to them. The fact it is and excepted estate does not change whether they can insist on seeing probate – it simply means that the process for obtaining probate will be easier.
Take a look at this article which may be a help.
We offer a fixed fee service for obtaining probate if you would rather not do so personally. Do get in touch if that is of interest.
For now – thank you again for reaching out to QLAW.
My mother in law passed recently and I’m the only surviving relative, and a named executor in the will.
She has no assets of value other than her property which is worth at most £150,000 and her bank account with maybe £30,000
I understand I will not need to complete IHT400, but do I need to get a formal valuation of the property for the IHT estimate and probate?
Hi Andy, and thanks for reaching out to QLAW. Sorry to hear of the loss of your mother in law.
In generic terms, if executors are confident that an estate falls well within the excepted estates provisions, and also feel qualified to have a ‘sensible guestimate’, that is permissible. The key is where IHT becomes payable that the need for valuations (obviously) become much more relevant. HOWEVER, if estimates are used when applying for probate which leave it within the excepted estates provisions, if for any reasons executors later believe this to have changed, corrective reporting is required.
Hope that helps. Don’t forget that QLAW offers a ‘pick and mix’ probate service including probate applications; estate accounts; probate property sales – whatever executors need. And better still, our fees are usually paid from the estate funds!
Hi. Trying to sort out an Excepted estate that doesn’t require probate.
The deceased was a joint tenant with his nephew, so his share of the property goes straight to him. There were limited funds in the bank account which the bank has given us access to, and no other assets.
The total value of the estate is about £201000 so no inheritance tax is due – but how do I notify HMRC as there doesn’t seem to be a relevant form, as not asking for probate. I believe there used to be an IHT205 but this is no longer valid
Hi Pat, and thank you for your query.
There remains (in my view) a significant degree of ambiguity around when and when not HMRC need to be (or not) notified in an excepted estate. It is something we have been in discussion with HMRC around (and Probate Registry).
We can not advise specifically on your circumstances without full knowledge of all aspects of the estate. But, we can confirm that where no IHT is payable, and no other aspects of the estate take it outside of the excepted estate provisions, there should be no requirement to submit anything to HMRC. Further, if you can deal with all assets without producing a Grant of Probate, no reference is needed to the Probate Registry either.
Thanks so much again for your enquiry. If you need any further help – do reach out. And, meantime, do let us know how you found the website REVIEW US HERE >
Hello – please can you advise on whether an estate can be deemed as an excepted estate, with no requirement to inform HMRC before applying for probate, when the total value exceeds the nil rate (in this case £375k) but the entire estate has been bequeathed to an adult daughter of the deceased (and therefore the increased threshold of £500k applies).
Hi, Many thanks for your guidance above regarding an Excepted Estate with no Probate required. Am I required to send the Will to Probate or can I keep it ? Thanks
Hi.
No, if you do not need to apply for Probate, there is no requirement for executors to send the will to the Probate Registry.
Best wishes from Team QLAW!
Hi
I’m confused about one of the qualifying criteria for an excepted estate.
The HMRC website states that one requirement is that the value of the estate is below the NRB threshold, but is this based on the gross estate value, the net estate value or the net qualifying estate value? I phoned HMRC for advice and was told that it’s based on the net qualifying figure, but I’m not entirely confident that the person properly understood my question.
In round figures my Mother left a total estate of 430,000. Of this 212,000 was made up of half the value of the house, half the value of the contents and half of a couple of joint accounts; this went to automatically to my Father under the rule of survivorship. The remaining 218,000 (which I understand to be the net qualifying estate value) is to be divided equally between my two brothers and I under the terms of her will. I know there is no IHT due, but do I need to submit an IHT or is this an excepted estate?
David
Hi David
Thanks so much for your question – and a super one it is too! The ambiguity around the point you raise is not OK! I am trying to get some sort of certainty on exactly this point, as it seems not only is it unclear for the public and legal profession, but there seems to be confusion too between HMRC -v- Probate Registry.
As things stand, the latest feedback I have from HMRC is that (subject to the various peripheral issues like domicile, total estate value, trusts etc) then the threshold for an excepted estate AFTER the application of all exemptions and reliefs are applied.
And so, on that basis, yes – the estate is excepted and the simplified application will apply. Given the ongoing confusion that exists in practice, do please make sure you cover yourself with a call through to HMRC and or the Probate Registry before lodging the application. Probate is taking around 4 months at the moment even for an application to be looked at – so anything you can do to avoid problems all the better.
As I say – we are lobbying for some clarity on this and will of course publish the outcome of that.
Thanks again David.
Hi
My mum passed away recently and she didn’t have a lot. £3,500 in her bank which they have released to me. I am her daughter sole benificery and the excecutor of her will. I have just recieved £9,500 from her life insurance today. As these funds have been released already I have assumed that i didn’t need probate. Do i need to notify HMRC of these funds for tax purposes. Sorry it seems such a trivial question but just want to make sure that i’m doing everything i should be.
Hi my dad (UK resident) passed away in January 2024. Mum is the sole inheritor named in his will and she is the executor of his will. He left £50 in his bank account; some art works probably not worth more than 5-10k in total; some personal items, gold cufflinks. Say 15k in total. No probate required to get access to his bank account obviously. He also had an insurance policy from canadian insurance company worth 440k gbp which he had named irrevocable beneficiaries (me and my 2 siblings) in 2016 (ie more than 7 years) . The canadian life company has already distributed this to us as named beneficiaries when we produced the death certificate, no probate requested. In Canada as I understand no IHT and as long as beneficiaries are named the proceeds pass to them, not to the estate of the deceased. As this was a canadian policy it was not held in UK trust but the effect seems to be the same. So: is this policy part of the estate or not? If not, then I am assuming no IHT400 to be filled out and the estate is exempt due to spouse and below NRB: if yes, does the fact that he named us irrevocably and therefore his estate had no rights to the proceeds mean that this is a PET – and therefore no IHT400 etc etc . Can’t seem to find an answer. Presume if it is part of estate then we have to pay tax @40% of 115k. HMRC has no guidance that I can find on this. Trying to figure out whether it is part of the estate and in either case what ppwk do we have to fill in? pointers welcome.
Hi my dad (UK resident) passed away in January 2024. Mum is the sole inheritor named in his will and she is the executor of his will. He left £50 in his bank account; some art works probably not worth more than 5-10k in total; some personal items, gold cufflinks. Say 15k in total. No probate required to get access to his bank account obviously. He also had an insurance policy from canadian insurance company worth 440k gbp which he had named irrevocable beneficiaries (me and my 2 siblings) in 2016 (ie more than 7 years) . The canadian life company has already distributed this to us as named beneficiaries when we produced the death certificate, no probate requested. In Canada as I understand no IHT and as long as beneficiaries are named the proceeds pass to them, not to the estate of the deceased. As this was a canadian policy it was not held in UK trust but the effect seems to be the same. So: is this policy part of the estate or not? If not, then I am assuming no IHT400 to be filled out and the estate is exempt due to spouse and below NRB: if yes, does the fact that he named us irrevocably and therefore his estate had no rights to the proceeds mean that this is a PET – and therefore no IHT400 etc etc . Can’t seem to find an answer. Presume if it is part of estate then we have to pay tax @40% of 115k. HMRC has no guidance that I can find on this. Trying to figure out whether it is part of the estate and in either case what ppwk do we have to fill in? pointers welcome.
Hi
My Mum passed away recently and was sole survivor, after my father passed last year. My mum left a will and made me and my brother executor of the estate. In total including the house the estate will be less than £500K I assume it will fall under the ”excepted estate” rules and we will not need to fill in form IHT400
Am I correct in assuming that we fill in the online form PA1P for obtaining probate and later IHT435 or am I missing something?
Michael
Hi Michael and thank you for your question. I am sorry to hear of the loss of your mum, and dad.
Yes, assuming your father’s estate passed outright to your mother, and all other excepted estates requirements are met, there should no need to submit a return to HMRC, allowing you to follow the more straightforward excepted estates probate application process.
If of any interest, we offer a ‘probate only’ service (ie where the executors deal with everything else). We charge just £950 (+VAT). Everything is done remotely, and the application is typically lodged with the Probate Registry within 24 (working) hours of reciving your instructions. If this is of interest, please let me know (nq@qlaw.co.uk)
Hi, I’ve been appointed as Executor for a person with a very small gross Estate of just under £25,000. There are just three bank accounts, all with the same bank and they have said that they are happy to discharge the funds without the need for Grant of Probate. My question is, “Do I still need to apply for Probate, even though this is not required to collect in the cash deposits?”
Please note, these cash deposits plus a few hundred pounds for personal possessions are the sum total of the individual’s worth.
Many thanks
Hi, and thanks for your question. It is NOT mandatory to obtain Probate. It is only needed if (a) the estate is not ‘Excepted’ (eg IHT is payable), or (b) if asset holders are insisting on seeing it to release funds. Hope that helps – and thanks again for reaching out to QLAW!
Hi – please can you advise as to whether we can apply directly for probate or whether we need to first obtain any relevant form from HMRC.
The deceased passed away on 27th April 2024. Her entire estate was worth c. £375k. This obviously exceeds the inheritance tax threshold, but as the entire estate was left in her will to her only daughter, the online checker confirms that no inheritance tax is due as the threshold increases to £500k in these circumstances. Can the application for probate go ahead, or is an IHT400 form required? The guidance is contradictory and unclear Many thanks.
Hi Darrell, and thanks for your query. Yes, I agree, the HMRC guidance on what can and cannot pass through the excepted estate procedure is in parts ambiguous! As I am sure you are aware, there are issues beyond just values that may apply (eg lifetime gifts, trusts, assets abroad), but if there is a property, then there should be a £500k exemption (at least) available meaning the excepted estates provisions may apply. If the deceased was previously the sole beneficiary of their spouses estate, a further £500k exemption may apply making a total of up to £1mil. Do reach out if you would like any help with the estate. Amongst other things, we offer a fixed fee for excepted estate probate applications. Many thanks from us all at Team QLAW!
Thanks for your reply Neil. I am happy to apply for probate but I just wasn’t sure whether I needed to obtain form IHT400 first, or whether as an excepted estate the form wasn’t necessary.
Hi This is a really helpful article indeed! Once thing that is still confusing – My case is my Father recently died, and my mother passed away three years ago, and no gifts from her estate etc so everything passed to my father. So all of her RNRB and NRB is transferred to my father… His estate there is his property (approx £400K) and his savings (approx £380K) so a total of £780K and the Will leaves everything to me and my two brothers. I assume that no IHT is due as two NRB is £325K X 2 and RNRB is £175K X 2 totals £1million. So his estate is below the IHT threshold? Question is if his estate is classed as “Expected”, and therefore I do not require to submit a IHT205 and IHT217 form? If this is the case then what HMRC information is actually required to be passed to HMRC in order to inform them of the estates value? And therefor what estate information is then required to apply for probate – I assume I can submit these estate numbers etc? Also his money is in two banks that I have access to via LPOA. So also do I actually need to apply for probate?
Hi Neil, Thank you for your guide but I have to say I’m still so confused with this whole process.
My mother passed away November 2023 making myself and my sister executors of her will. There was an LPA was in force and as a family we were under the belief that we would continue to have access to my mother’s bank account only to discover that after informing the bank of my mother’s passing, an LPA becomes inactive upon their death. The account was therefore closed and they will not allow any further access until a Grant of Probate is granted. Thankfully they did however process all payments associated with her funeral.
Having gone through the online IHT checker process and receiving a confirmation that were not liable for IHT, I completed the Grant of Probate application online and awaited a response. That response came back asking for answers to questions that I had already provided in the submissions via the online IHT checker however because I have answered NO to a particular question then we apparently have to complete an IHT400/421. Please refer to the below:-
Did the deceased have a pre-deceased spouse or civil partner (was the deceased widowed at their date of death)? Yes No
Are you claiming the unused IHT allowance (‘nil-rate band’) of the deceased’s late spouse or civil partner? Yes No
If you have answered No to the above question (unused IHT allowance) and the net qualifying value is above £325k then you must complete an IHT400/421 – Please send these forms (if not already sent) to H.M. Revenue & Customs to ensure that your application can proceed as quickly as possible. They will then send you a cover letter with a unique reference code, Please send this to us via email – contactprobate@justice.gov.uk
Having already provided the financial figures via the submission after going through the IHT online checker process, I’m now confused as to why we are now being asked to again provide this same info i.e.
Gross value of the estate for inheritance tax =£
Net value of the estate for inheritance tax =£
Net qualifying value of the estate =£
Gross value of the estate for probate =£
Net value of the estate for probate =£
Thank you and the team at QLAW for any further clarity you can provide to assist us in hopefully completing this process.
Hello,
Thank you and a very interesting and useful article
In the scenario that we have an excepted estate – total value is under the value of 650,000, using the unused NRB from a previous spouse and all other conditions for an excepted estate are met, are there any forms to submit to HMRC?
Hello,
Thank you and a very interesting and useful article
In the scenario that we my mum han excepted estate
– total value is under the value of 650,000
– we are using the unused NRB from my father who passed away years go
– all other conditions for an excepted estate are met
Are there any forms to submit to HMRC? Do we need to submit any forms to transfer any unused nil rate band from my father?
I’m reading we don’t, but just wanted to make sure
many thanks
Hi Neil my mother and father had a property when my mother died the property was divided in such a way that my father held a 50% of the property and me and my brother held the other 50% share between us now my father as died under the shared ownership rule do we still need to apply for probate. also we will need to sell the property to settle dads estate which comprises of a £10.000 to my step sister could you please advise.