If you are looking for the IHT205 form for an excepted estate and the death occurred on or after 1 January 2022 in England and Wales, there is no longer a separate IHT205 to complete. The Inheritance Tax details that used to go on that form are now entered directly into the online probate application on GOV.UK, which works out whether the estate qualifies as excepted and therefore owes no Inheritance Tax.1GOV.UK. IHT206 Notes to Help You Fill In Form IHT205 (2011) If the estate meets the excepted criteria, you do not need to submit a full IHT400 to HMRC.
The old paper IHT205 still has a role in one situation: deaths on or before 31 December 2021, or cases where the online service cannot be used. In those cases the paper form is posted alongside the probate application.
Confirming the Estate Qualifies as Excepted
An excepted estate is one where no Inheritance Tax is due, so HMRC does not need a detailed account. The Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004, as amended, sort excepted estates into three categories.2GOV.UK. Inheritance Tax: Reduced Reporting Requirements If the estate does not fit any of them, the full IHT400 is required before probate can be granted.
Low-Value Estates
A low-value excepted estate is one whose gross value does not exceed the nil-rate band. The NRB has been frozen at £325,000 since 2009 and remains at that level through at least the 2029–30 tax year.3GOV.UK. Rates and Allowances: Inheritance Tax Thresholds and Interest Rates Include the deceased’s share of any jointly held assets when adding this up.
Where a valid transferable nil-rate band claim is available from a predeceased spouse or civil partner, the gross value for a low-value estate can go up to double the NRB, so £650,000.4GOV.UK. IHTM06024 – Rules About Excepted Estates: When the Nil Rate Band Is Increased
Exempt Estates
An exempt excepted estate applies when the gross value is above the NRB but everything passes to an exempt beneficiary: a UK-domiciled spouse or civil partner, a qualifying charity, or a combination. For deaths on or after 1 January 2022, the gross value can be up to £3 million provided the net chargeable value, after liabilities and the spouse or charity exemption, is nil.5GOV.UK. How to Value an Estate for Inheritance Tax and Report Its Value
If a TNRB claim is also in play on an exempt estate, the gross value ceiling stays at £3 million but the net chargeable value must not exceed £650,000.4GOV.UK. IHTM06024 – Rules About Excepted Estates: When the Nil Rate Band Is Increased A small legacy to a non-exempt beneficiary can push the net chargeable value above that ceiling and cost you excepted status.
Non-UK Domiciled Estates
Where the deceased was never domiciled in the UK, or was not a long-term UK resident under the newer rules, the estate can be excepted if the gross value of UK-situated assets is £150,000 or less.6HM Revenue & Customs. IHTM06021 – Rules About Excepted Estates: Foreign Domiciliaries or Non Long-Term UK Residents Overseas assets sit outside UK Inheritance Tax for a non-domiciled person and are left out of the calculation.
Lifetime Gifts and the £250,000 Ceiling
Lifetime gifts made in the seven years before death catch out many personal representatives. To keep the estate excepted, the total value of these “specified transfers” must not exceed £250,000 for deaths on or after 1 January 2022.7GOV.UK. IHTM06018 – Rules About Excepted Estates: Specified Transfers
When totalling the gifts, you can deduct annual and small gift exemptions, the marriage or civil partnership exemption, and gifts made from normal expenditure out of income (up to £3,000 per tax year).7GOV.UK. IHTM06018 – Rules About Excepted Estates: Specified Transfers If the net figure still exceeds £250,000, the estate is not excepted, even where the estate itself is below the NRB, and you will need the full IHT400.
Valuing the Estate
Every asset is valued at its open market value on the date of death, meaning the price it would realistically fetch from a willing buyer. These figures decide whether the estate is excepted and whether HMRC has grounds to challenge you later.
For residential property, get a realistic market appraisal as at the date of death. A written estate agent’s valuation is often enough for a straightforward property; higher-value or unusual properties may need a formal surveyor’s report. Record the address, the figure, and how you got there.
For bank and building society accounts and investment portfolios, ask each institution for the exact date-of-death balance. Listed shares are valued using the quarter-up rule from the Stock Exchange Daily Official List. Include the deceased’s share of jointly owned assets, not only sole-name holdings.
Personal belongings are valued at what they would sell for, not their purchase price or replacement cost. Modest household contents can be estimated reasonably; higher-value items such as jewellery or collections should be professionally appraised.
Subtract debts owed at the date of death, including mortgages, loans, credit card balances, utility bills, and care home fees. Reasonable funeral expenses are also deductible. That gives the net estate value, which sits alongside the gross value in the online application.
Claiming the Transferable Nil-Rate Band
Where a first spouse or civil partner did not use all of their NRB, the unused portion transfers to the survivor. If none of the first partner’s NRB was used, the survivor’s estate gets the full extra £325,000, taking the combined threshold to £650,000.8GOV.UK. Transferring Unused Basic Threshold for Inheritance Tax
To claim, you need the date of death and basic estate details of the first spouse or civil partner, plus the marriage or civil partnership certificate and their death certificate. The claim is made inside the online probate application. If some of the first partner’s NRB was used (for example by a legacy to someone other than the surviving partner), only the unused percentage transfers; apply that percentage to the current £325,000 to work out the extra allowance.
Claiming the Residence Nil-Rate Band
The residence nil-rate band adds up to £175,000 where a home is passed to direct descendants. It is frozen at £175,000 through at least the 2027–28 tax year.9GOV.UK. Inheritance Tax Nil-Rate Band and Residence Nil-Rate Band Thresholds From 6 April 2026 to 5 April 2028 With the standard NRB, this gives an individual threshold of £500,000, and a survivor claiming the transferable RNRB as well can reach a combined £1 million.
The deceased must have owned a residential property, or a share of one, that forms part of the estate and passes to a direct descendant. HMRC counts children, grandchildren, and further lineal descendants, including step-children, adopted children, foster children, and children of whom the deceased was appointed guardian. Spouses and civil partners of those descendants also qualify. Nephews, nieces, and siblings do not.10GOV.UK. Work Out and Apply the Residence Nil Rate Band for Inheritance Tax
The RNRB tapers away where the total estate value exceeds £2 million, reducing by £1 for every £2 above that threshold.11GOV.UK. Inheritance Tax Nil-Rate Band, Residence Nil-Rate Band From 6 April 2028 A downsizing addition can preserve some RNRB where the deceased moved to a less valuable home or stopped owning one, provided assets of equivalent value go to direct descendants.
Submitting the Application
For deaths on or after 1 January 2022 in England and Wales, you enter the Inheritance Tax figures inside the online probate application at GOV.UK. The system asks for the gross estate value, the net estate value, and the net qualifying value after exempt transfers, then decides whether the estate is excepted.1GOV.UK. IHT206 Notes to Help You Fill In Form IHT205 (2011)
You then print and sign the legal statement, and post it along with the original will (if there is one) and an official copy of the death certificate to the Probate Registry. The application fee is £300 for estates valued above £5,000, with no fee for estates worth £5,000 or less.12GOV.UK. Applying for Probate: Fees
For a death on or before 31 December 2021, the paper IHT205 is still required and is posted with the probate application. Once satisfied, the Probate Registry issues the Grant of Probate, or Letters of Administration if there is no will. That grant is what unlocks the deceased’s bank accounts, the ability to sell property, and distribution to beneficiaries.
After Submission: HMRC Review and Penalties
The grant does not close the file with HMRC. Even for excepted estates, HMRC can open an enquiry. The standard window to raise an assessment is four years from when the tax became due; that extends to six years for careless errors, twelve years where offshore assets are involved, and twenty years for deliberate inaccuracies.13GOV.UK. Assessing Time Limits: Tables of Time Limits for Relevant Taxes: Inheritance Tax
If HMRC concludes the estate was not actually excepted, because values were understated or the wrong category was claimed, the personal representatives are liable for the unpaid tax and possible penalties. Under Schedule 24 of the Finance Act 2007, penalties are a percentage of the tax lost: up to 30% of the lost tax for a careless mistake, 70% for a deliberate error, and 100% where the inaccuracy was deliberate and concealed.14UK Parliament. Finance Act 2007, Schedule 24 Voluntary disclosure before HMRC gets in touch reduces those figures significantly.
Keep thorough records of every valuation, every gift accounted for, and every exemption claimed. Executors who estimate casually, or who overlook jointly held investments and lifetime gifts, are the ones who tend to hear from HMRC years later.