HMRC Inheritance Tax: Customer Guide

What is the threshold for an excepted estate?

For an excepted estate, the inheritance tax (IHT) threshold means the amount above which IHT is payable. If the death was between 6 August and 5 April in any one tax year, you should use the threshold that applied at the date of death.

If the deceased died after 5 April but before 6 August in any one tax year and the grant of representation is applied for before 6 August of that year, the threshold which applies for an excepted estate is the one from the tax year before that in which the deceased died.

Examples:

Joan Brown died on 9 May 2004 and the grant was taken out on 21 July 2004. The correct threshold to use was £255,000.

David Smith died on 7 June 2004 and the grant was taken out on 21 August 2004. The correct threshold to use was £263,000.