What is an excepted estate?

When dealing with probate and estate administration, you may come across the term excepted estate. It is important to understand whether the estate that you are dealing with falls under this term, as it can affect how you report the estate to HM Revenue & Customs (HMRC) for Inheritance Tax (IHT) purposes. Complete Estate Protection understands fully the intricacies of this.

IHT is a tax payable to HMRC upon a person’s death. It is paid from the estate, but the tax is levied on assets (property, money, possessions, etc.) that the deceased owned. When the estate is excepted, the Personal Representative does not need to submit a full IHT account to HMRC. The requirements are:

• Low value excepted estates: the value is below the current IHT threshold of £325,000 (this is known as the Nil Rate Band [NRB]); the estate is worth £650,000 or less and any unused NRB is being transferred from a spouse/civil partner; or the assets in a single Trust are valued below £250,000.
• Exempt excepted estates: the deceased left everything to a spouse, civil partner, a charity, or community amateur sports club and the estate is worth less than £3 million.
• Foreign domiciled excepted estates: the deceased was a foreign domiciliary (living permanently outside of the UK) when they died and the value of their UK assets is below £150,000.

The above requirements apply to all deaths on or after 1^st January 2022. For deaths on or before 31^st December 2021, the maximum value for the estate is £1 million, rather than £3 million, when everything is left to a spouse, civil partner, a charity, or community amateur sports club. Additionally, the limit for assets in a single Trust is £150,000, rather than £250,000.

We can talk you through this so that you have a complete understanding and can also help you to negotiate this in order that you do what is required of you.

If you’re based near Middlesbrough or Teesside or in the areas of Stainsby, Normanby, Stainton and Billingham or anywhere in the surrounding area, we can assist with anything you may require please contact 01642 493101 or email info@ceprotection.com. Please click here to learn more about Wills.