IHT205 Worked Example: Reporting an Excepted Estate for Deaths On or Before 31 December 2021
Form IHT205 was the short Inheritance Tax return for "excepted estates" where no tax was due, but it applies only to deaths between 6 April 2011 and 31 December 2021. For deaths on or after 1 January 2022 the form was abolished — most excepted estates now report nothing to HMRC at all, with the value questions folded into the probate application instead. If you still need to deal with a pre-2022 death, this is the box-by-box guide.
Why IHT205 only covers deaths on or before 31 December 2021
HMRC scrapped IHT205 as part of the Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021. The official IHT205 publication is explicit that the form is for "deaths from 6 April 2011 to 31 December 2021" (gov.uk: Report an excepted estate for Inheritance Tax (IHT205)).
For deaths on or after 1 January 2022, the rules changed in two important ways:
- No separate IHT form for most excepted estates. If the estate qualifies as excepted and you need probate, you give the value figures inside the probate application (PA1P/PA1A or the online service) — there is no IHT205 to complete and send to HMRC. If you do not need probate at all, you generally report nothing.
- The qualifying limits were loosened. The exempt-estate gross limit rose from £1 million to £3 million, and the bands for gifts, trusts and foreign assets were widened. So an estate that would have needed the full IHT400 under the old rules may now slip in as excepted.
This means a 2020 death and a 2022 death are handled by completely different machinery. Date of death — not date of application — decides which set of rules applies.
The three excepted-estate categories (pre-2022 rules)
Under the rules that governed IHT205, an estate was "excepted" — meaning no full IHT account was needed — if it fell into one of three categories, every condition was met, and none of the disqualifiers (below) applied. The figures here are the pre-2022 limits taken from HMRC's IHT206 notes to IHT205.
| Category | Gross-value limit | Core condition |
|---|---|---|
| 1. Low value (non-taxpaying) | £325,000 | Gross estate at or below the nil-rate band, so no tax could be due. |
| 2. Exempt estate (spouse / civil partner / qualifying charity) | £1,000,000 | Gross estate up to £1m, but the value passing outside the spouse/charity exemptions — the net chargeable value — must be no more than £325,000. |
| 3. Foreign domiciliary | £150,000 UK assets | Deceased was never UK-domiciled and held only limited UK assets. |
Where the survivor was claiming a transferred nil-rate band from a spouse or civil partner who died first, the low-value limit could be doubled to £650,000 — but only if the first spouse's whole nil-rate band was unused, which meant a different short form (IHT217) had to accompany the IHT205.
What automatically pushed you onto the full IHT400 instead
Even within the limits above, certain features disqualified an estate from being "excepted" for IHT205 and forced the full IHT400 account. Under the pre-2022 rules these were:
| Feature | Pre-2022 limit before IHT400 was required |
|---|---|
| Lifetime gifts (chargeable transfers) in the 7 years before death | More than £150,000 |
| Assets held in a single trust the deceased benefited from | More than £150,000 (or more than one trust) |
| Foreign (non-UK) assets in a UK-domiciled estate | More than £100,000 |
| Gifts with reservation of benefit, or certain alternatively-secured pension funds | Any — automatic IHT400 |
Note the post-2022 versions of these limits are higher (for example the gift and foreign-asset bands were widened from 2022), which is another reason to anchor on the date of death.
Worked example — Margaret Whitlock, died 14 March 2021
Margaret, a widow domiciled in Yorkshire, died leaving a modest, clean estate. Her son Daniel is the executor. Because she died before 1 January 2022 and is non-taxpaying, IHT205 is the correct form.
Step 1 — Total the assets (gross):
| Asset | Value |
|---|---|
| Semi-detached house (sole name) | £235,000 |
| Building society savings | £38,000 |
| Current account | £4,500 |
| Premium Bonds | £2,000 |
| Car & household contents | £3,500 |
| Gross estate | £283,000 |
Step 2 — Deduct allowable liabilities: funeral account £3,000. There is no mortgage. Net estate = £283,000 − £3,000 = £280,000.
Step 3 — Test against the limit. Gross value £283,000 is above the £325,000 nil-rate band? No — it is below it. Margaret made no gifts, had no trusts, no foreign assets, and no reservation of benefit. So she qualifies as a low-value excepted estate and IHT205 is correct.
Step 4 — Fill the simplified value boxes (IHT205 (2011) box references):
| Box | What it asks | Margaret's figure |
|---|---|---|
| A–D | Joint / nominated / pre-owned assets (none here) | £0 |
| D | Gross value of assets in the deceased's sole name | £283,000 |
| F | Allowable debts (funeral) | £3,000 |
| G | Net estate for IHT | £280,000 |
| H | Gross value for IHT (assets before debts) | £283,000 |
| J/K | Net qualifying value after exemptions | £280,000 |
Step 5 — Result. The gross figure in box H (£283,000) sits comfortably under £325,000, so no tax is payable and no IHT400 is needed. Daniel submits IHT205 alongside the probate application (the pre-2022 route), and waits for the grant. Box letters can vary slightly by IHT205 vintage — always read the boxes on the actual form you are completing; this illustrates the flow, not the literal layout.
When an estate that "looked excepted" actually needed IHT400
The most expensive mistakes I see are executors who filed IHT205 when the estate quietly breached a disqualifier. Take the same Margaret estate and add one fact:
Worked example — the £80,000 gift that changes everything
Suppose Margaret had also given her granddaughter £80,000 in 2017 and £90,000 in 2019 — £170,000 of chargeable gifts inside the 7 years before her 2021 death. That is over the £150,000 pre-2022 gift limit. The estate is no longer excepted, even though its own assets are well under £325,000. Daniel would have had to complete the full IHT400 account plus the IHT403 gifts schedule — not IHT205 — and account for the gifts against the nil-rate band first. The same outcome follows from more than £100,000 of foreign assets, or more than £150,000 in a trust she benefited from.
So before reaching for IHT205, run the full disqualifier list: gifts over the limit, trust interests, foreign assets, gifts with reservation, and alternatively-secured pensions each force the long form regardless of how small the headline estate looks.
What to do today if you still face a pre-2022 death (or a wrong IHT205)
It is mid-2026, but pre-2022 deaths still surface — delayed administration, a forgotten asset, or a probate application that stalled. Here is the current practical position:
- Still need to apply for probate on a pre-2022 death? You still use the IHT machinery in force at the date of death. If it was an excepted estate, IHT205 (the 2011 version) remains the correct return for a death on or before 31 December 2021. The archived form and IHT206 notes are still on gov.uk.
- Found you filed IHT205 but the estate was actually taxable or non-excepted? Tell HMRC. You can correct a return by submitting a corrective account (form C4) or writing to HMRC's Inheritance Tax office; do this promptly to limit interest and penalties.
- Found new assets after the grant? The personal representatives have a duty to report changes to HMRC even after probate. A late-discovered asset can move an estate from excepted to taxable.
- Unsure which side of 1 January 2022 you are on? Use HMRC's "check if you need to send full details of the estate" tool, which routes by date of death.
If gifts, trusts, foreign assets or a taxable margin are anywhere near the limits, get a STEP-qualified practitioner or solicitor to confirm the route before you submit. Choosing the wrong form delays the grant and can create personal liability for the executor.
Free: the pre-2022 excepted-estate decision checklist
A one-page test — limits, disqualifiers and box order — so you know in five minutes whether it's IHT205 or IHT400.
You're on the list — we'll be in touch.
Frequently asked questions
Can I still use form IHT205 in 2026?
Only for a death that occurred on or before 31 December 2021. For deaths on or after 1 January 2022, IHT205 was abolished and excepted-estate values are reported through the probate application instead (or not reported at all if probate isn't needed).
What gross-value limit let an estate use IHT205?
£325,000 for a low-value (non-taxpaying) estate, or up to £1 million for an exempt estate passing to a spouse, civil partner or charity — provided the net value outside those exemptions stayed at or below £325,000. A transferred nil-rate band could double the low-value limit to £650,000.
What made an estate non-excepted, forcing IHT400?
Under the pre-2022 rules: chargeable gifts over £150,000 in the 7 years before death, trust assets over £150,000 (or more than one trust), foreign assets over £100,000, any gift with reservation of benefit, or certain pension arrangements. Any one of these required the full IHT400 account.
Do post-2022 excepted estates have to tell HMRC anything?
Often no. If the estate is excepted and you do not need probate, you generally report nothing to HMRC. If you do need probate, the value information goes on the probate application — there is no separate IHT205-style return to send.
I filed IHT205 but later found the estate was taxable. What now?
Contact HMRC promptly and submit a corrective account (form C4) setting out the right figures. Acting quickly limits interest and penalties. Personal representatives have a continuing duty to correct errors and report newly discovered assets.
Is the £3 million figure relevant to IHT205?
No — the £3 million exempt-estate limit is part of the post-1 January 2022 rules. For IHT205 (deaths up to 31 December 2021) the exempt-estate gross limit was £1 million.
General information, not personal United Kingdom tax/legal advice. Verify with a qualified professional.
Sources: HMRC / GOV.UK — Report an excepted estate (IHT205), IHT206 notes, and Check if you need to send full details of the estate. Figures are the pre-2022 excepted-estate limits in force for deaths up to 31 December 2021.