Excepted Estates and Small Estates

Gary Green
Gary Green
September 12, 2017

The amount inherited by a spouse or civil partner is usually exempt from Inheritance Tax.

The situation is more complicated if the surviving spouse or civil partner is not domiciled in the UK. We will explain below the meaning of some commonly used phrases relating to Inheritance Tax, excepted estates and small estates.

Excepted Estates

Many estates are classed as excepted estates. These are estates which do not have any Inheritance Tax to pay. So they can take a reduced disclosure route to probate. There are special rules for handling an ‘excepted estate’. An estate will usually be referred to as an excepted estate where:

  • The total value of the estate does not exceed the Nil Rate Band of IHT, currently £325,000. Any Potentially Exempt Transfers made by the deceased must also be taken into account.
  • An estate where the first spouse / civil partner has already died: the estate is valued at less than £650,000.
  • The gross value of the estate does not exceed £1,000,000 and there is no tax to pay because either all assets were left to the deceased’s spouse or civil partner living in the UK or to a ‘qualifying’ charity.
  • The deceased was domiciled outside the UK at the date of their death and had never been domiciled (or deemed domiciled for IHT purposes) in the UK during their lifetime and the gross value of their UK estate does not exceed £150,000.

The rules about excepted estates are concerned with gross values so in most cases the treatment of liabilities does not have any impact. If the estate is not an excepted estate a full Inheritance Tax account must be completed.

Small estates

If the deceased’s estate is worth less than £5,000 or the deceased owned everything jointly with their spouse or civil partner, probate is not usually needed.

Probate is the process of administering an estate of someone who has died in order to resolve all claims and distribute the assets of the deceased as per their final wishes.

This is called a ‘small estate’. Probate is almost always required when:

  • the deceased’s estate includes property
  • ... or land
  • held in their own name
  • ... or jointly under a tenancy in common arrangement.
Interested in our services?
Fill in your details and a member of our experienced team will be in touch shortly to discuss your needs.
Contact Form Demo (#1)
We adhere to strict GDPR rules and do not reveal or sell your data to any third-parties. For more, please read our Privacy Policy.
Latest Insights
May 16, 2024
Company Tax Investigations By HMRC

If HMRC decides to carry out an investigation into a company’s tax returns, it is important...

May 9, 2024
A Guide To The WDF (Worldwide Disclosure Facility)

More than a hundred countries around the world have made a commitment to exchange information with...

May 2, 2024
Contractual Disclosure Facility And HMRC COP9

Any tax investigation that HMRC carries out can be regarded as serious. However, if you become...

April 25, 2024
A Guide To Managed Service Companies, Personal Services Companies And IR35

Usually, people work as either a self-employed individual or an employee for a business. Nevertheless, there...

April 18, 2024
Criminal Tax Investigations

It is HMRC’s aim to ensure that taxpayers comply with the regulations and law, but HMRC...

April 11, 2024
VAT Inspections

VAT inspections involve HMRC visiting or contacting your business to carry out an inspection of its...

October 23, 2023
PAYE Investigations

Dive into the world of PAYE investigations. Uncover the facts, implications, and insights in this informative blog

September 29, 2023
London-based accountancy business acquired by Key Business Consultants

Exciting Merger Alert: London's Reed Taylor Benedict & Benedict Leff Accountants Acquired by Key Business Consultants.

September 18, 2023
Tax Tribunals – An Overview

Dive into the realm of Tax Tribunals: A comprehensive overview shedding light on this crucial aspect of taxation.

View Our latest insights »
Get the latest UK tax & business news and guidance delivered straight to your inbox
Newsletter Form (#2)
We care about the protection of your data. No spam. Unsubscribe anytime.
Copyright © 2022 Key Business Consultants LLP. Reg: E&W OC389322
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram