IHTM06013 - Rules about excepted estates: exempt excepted estates

The conditions for these estates are that

  • the deceased died on or after 6 April 2004, domiciled in the United Kingdom,
  • the gross value of the estate, including the deceased’s share of any jointly owned assets, any specified transfers (IHTM06018) and any specified exempt transfers (IHTM06019)

does not exceed £3,000,000 for deaths on or after 1 January 2022 (£1,000,000 for deaths before this date), and the net chargeable value of the estate after deduction of allowable liabilities and spouse or civil partner exemption and/or charity exemption only does not exceed the Inheritance Tax nil rate band (IHTM06011), and for deaths on or after 1 January 2022

  • if the estate includes any assets in trust, they are held in a single trust and the gross value does not exceed £1,000,000 and the net chargeable value after deduction of spouse or civil partner exemption and/or charity exemption only does not exceed £250,000 (IHTM06020),
  • if the estate includes foreign assets, their gross value does not exceed £100,000,
  • if there are any specified transfers, their chargeable value does not exceed £250,000,
  • the deceased had not made a gift with reservation of benefit.

For deaths before 1 January 2022 the maximum chargeable value for assets held in trust (IHTM06020), and the limit on the chargeable value of any specified transfers (IHTM06018), is lower.

Apart from spouse or civil partner exemption and/or charity exemption, no other exemption or relief can be taken into account.

You should note that:

  • Where the death is on or after 1 March 2011, an estate can only qualify as an exempt excepted estate where the amount of spouse or civil partner exemption and/or charity exemption is greater than nil, and
  • where the death is on or after 1 April 2014, liabilities can only be taken into account in arriving at the net chargeable value of the estate, provided the debt would be allowed as a deduction against the estate under the rules introduced by Finance Act 2013 (IHTM06028).

The circumstances in which spouse or civil partner exemption and charity exemption can be deducted to establish whether the estate qualifies as an excepted estate have been restricted. Spouse or civil partner exemption can only be deducted if both spouses or civil partners have always been domiciled in the United Kingdom, and the amount of spouse or civil partner exemption may be restricted where the deceased died in Scotland (IHTM06014).

Charity exemption can only be deducted if the gift is an absolute gift to the organisation concerned.