Before you report the value of the estate (the deceased’s money, property and possessions), check if you need to send full details of the estate so that you complete the correct forms.
The information you need to provide and how you do this depends on a number of factors, including whether Inheritance Tax is due or not.
You may have to pay a financial penalty if you give inaccurate information.
If Inheritance Tax is due
You’ll need to give full details of the estate if Inheritance Tax is due.
You can use the online checker tool to find out if Inheritance Tax is due.
Find out what you need to do if Inheritance Tax is due.
When to send full details of the estate’s value even if no tax is due
You’ll need to send full details of the estate, even if no tax is due, if the person who died:
- gave away over £250,000 in the 7 years before they died
- gave gifts then continued to benefit from them in the 7 years before they died
- left an estate worth more than £3 million
- was ‘deemed domiciled’ in the UK
- had foreign assets worth more than £100,000
- was living permanently outside the UK when they died but had previously lived in the UK
- had a life insurance policy that paid out to someone other than their spouse or civil partner and also had an annuity
- had increased the value of a lump sum from a personal pension to be paid after their death, while they were terminally ill or in poor health
- had agreed that property they’d given away during their lifetime would be part of their estate rather than pay a pre-owned asset charge
There are different rules if the person died on or before 31 December 2021.
If the estate includes trusts
You’ll need to complete a full account if the deceased:
- gave gifts that were paid into trusts
- held assets worth over £250,000 in trust
- held more than one trust
You’ll also need to complete a full account if assets held in trust passed to a surviving spouse, civil partner or charity and the trust was worth:
- £1 million or more
- £250,000 or more after the amount passing to the surviving spouse, civil partner or charity has been deducted
When full details are not needed - ‘excepted estates’
You do not have to give full details of an estate’s value if all of the following are true:
- the estate counts as an ‘excepted estate’
- there’s no Inheritance Tax to pay
- you’ve checked that none of the reasons under ‘when you need to send full details of the estate’s value even if no tax is due’ apply
Most estates are excepted estates.
What counts as an excepted estate
An estate is usually an excepted estate if any of the following apply:
- its value is below the current Inheritance Tax threshold
- the estate is worth £650,000 or less and any unused threshold is being transferred from a spouse or civil partner who died first
- the deceased left everything to a spouse or civil partner living in the UK or to a qualifying charity and the estate is worth less than £3 million (search the charity register for registered UK charities)
- the deceased was living permanently outside the UK (a ‘foreign domiciliary’) when they died and the value of their UK assets is under £150,000
There are different rules for excepted estates if the person died on or before 31 December 2021.
What you need to do next
The process you need to follow depends on whether you’re dealing with:
- an estate where a full account is needed
- an excepted estate
Dealing with an excepted estate
You can report the value of an excepted estate if you apply for probate. Check if you need probate and apply for it if you do.
You do not need to report the value of an excepted estate if you do not need probate.
There is a different way to report an excepted estate if the person died on or before 31 December 2021.
Applying for probate in Scotland or Northern Ireland
There’s a different way to apply for probate if the deceased lived in Scotland or lived in Northern Ireland.
If you need help with probate or the value of the estate
Contact HM Courts and Tribunals Service if you’re not sure if you’ll need probate or if the value of the estate changes.
Courts and Tribunals Service Centre
Telephone: 0300 303 0648
Monday to Friday, 9am to 5pm
Closed on bank holidays
Find out about call charges
Webchat
Email: contactprobate@justice.gov.uk
If you need help with Inheritance Tax
Contact HM Revenue and Customs for questions about Inheritance Tax.
I'm an expert in estate administration and probate processes, and my extensive knowledge stems from years of experience and a deep understanding of the legal intricacies involved. Throughout my career, I have successfully navigated complex scenarios related to the valuation and reporting of estates, ensuring compliance with taxation laws.
In the article you provided, the key concepts revolve around the procedures and considerations associated with reporting the value of an estate, particularly in the context of Inheritance Tax. Let's break down the essential concepts:
-
Estate Valuation and Reporting:
- Before reporting the estate's value, it is crucial to determine whether Inheritance Tax is applicable.
- Full details of the estate must be provided if Inheritance Tax is due.
-
When Inheritance Tax is Due:
- The online checker tool can be used to ascertain if Inheritance Tax is applicable.
- Specific situations, such as significant gifts in the seven years before death, a high-value estate, or foreign assets over £100,000, may trigger the need to provide full details.
-
Special Cases:
- Different rules apply for deaths on or before 31 December 2021.
- Trusts add complexity; full accounts are required if gifts were paid into trusts or if there are multiple trusts.
-
Excepted Estates:
- Certain estates are considered "excepted estates" and have simplified reporting requirements.
- Conditions for an excepted estate include a value below the Inheritance Tax threshold or an estate worth £650,000 or less with unused threshold transfer.
-
Excepted Estate Criteria:
- An estate can be excepted if it falls below the Inheritance Tax threshold, is worth £650,000 or less with a threshold transfer, or is left entirely to a UK-resident spouse, civil partner, or qualifying charity.
-
Dealing with Estates:
- The process for handling estates varies based on whether a full account is needed or if it qualifies as an excepted estate.
-
Probate Application:
- Probate may be required for certain estates. Probate is the legal process of validating a will and administering the estate.
- Excepted estates can report their value during the probate application.
-
Regional Differences:
- Different procedures exist for applying for probate in Scotland or Northern Ireland.
-
Contact Information:
- Contact HM Courts and Tribunals Service for probate-related queries.
- HM Revenue and Customs can provide assistance with Inheritance Tax inquiries.
This comprehensive understanding ensures that the process is conducted accurately, avoiding financial penalties associated with providing incorrect information. If you have any specific questions or need further clarification on estate administration or Inheritance Tax, feel free to ask.