Excepted estates

The changes came in at the start of the year and apply to the estate of anyone who dies on or after 1 January 2022. Now, before you make a report to HM Revenue and Customs (HMRC) you need to check whether the estate is an ‘excepted estate’ to make sure you complete the right forms.

There are several reasons why an estate may now be classified as ‘excepted’:

• The estate has a value below the current IHT threshold (£325,000 for one person)
• Any unused threshold is being transferred from a spouse or civil partner who died first and the estate is worth £650,000 or less
• The estate is worth less than £3m and the deceased left everything in their estate to their surviving spouse or civil partner who lives in the UK, or to a qualifying registered UK charity
• The estate has UK assets worth less than £150,000 and the deceased had permanently been living outside of the UK when they died.

A step-by-step guide

Further details on how to value an estate for IHT and report its value can be found here www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate

Thinking of your own IHT planning

More people are having to pay IHT; HMRC figures show IHT receipts for the period April 2021 to January 2022 to be £5bn, which is a £700m increase on the same period one year earlier¹. IHT planning is a complicated subject, but sensible financial planning can help to reduce the amount of IHT payable and safeguard your wealth for the future.

¹HMRC, 2022

The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning