IHT400 vs IHT205: the excepted estates walkthrough (and why IHT205 no longer exists)

Which form, in one line

For a death on or after 1 January 2022 it is either the full IHT400 account or no inheritance tax return at all; form IHT205 was abolished for those deaths. So the real question is whether the estate counts as an excepted estate, broadly one under the £325,000 threshold, under £650,000 with a transferred spouse's allowance, or under £3 million where everything passes tax free to a UK spouse, civil partner or charity. An excepted estate files no IHT forms; its values go straight onto the probate application. Every other estate, and every estate that actually owes tax, needs IHT400.

The old comparison lingers because IHT205 served executors for a decade, but the rules themselves moved on in 2022. This walkthrough sets out the current position, checked against HMRC guidance, and a step-by-step decision path. If you want a head start on the numbers, our IHT threshold calculator shows how your estate sits against the allowances that drive the answer. One scope note before we start: this guide is written for England and Wales, since Scotland handles estates through confirmation and form C1 rather than probate, and it is general information rather than legal or financial advice.

What changed on 1 January 2022

Until the end of 2021, almost every estate had to file something with HMRC. Straightforward estates with no tax to pay used the short return of estate information, form IHT205; everything else used the full IHT400 account. The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 swept the short form away for deaths on or after 1 January 2022. GOV.UK's IHT205 page is explicit: the form is only for use where the person died on or after 6 April 2011 and on or before 31 December 2021.

For deaths from 2022 onwards the regime is simpler and more generous at the same time:

• Excepted estates report nothing to HMRC directly. Per GOV.UK's guidance on checking the type of estate, if probate is needed you report the estate's estimated value as part of the probate application itself, and if probate is not needed, "you do not need to report the value of an excepted estate" at all.
• The qualifying limits were widened. The exempt estate ceiling rose from £1 million to £3 million, and the allowance for lifetime gifts rose to £250,000, so far more estates now qualify for the simplified route than ever qualified for IHT205.
• IHT400 carried on unchanged in role. It remains the full account for estates that owe tax or fail the excepted conditions.

The practical upshot: the old two-form fork became a fork between a form (IHT400) and a few boxes on the probate application.

Step 1: does the estate qualify as excepted?

For deaths on or after 1 January 2022, GOV.UK sets out three categories of excepted estate:

1. Low value estates. The gross value, including the deceased's share of jointly owned assets and the chargeable value of gifts made in the seven years before death, is below the inheritance tax threshold: £325,000, or up to £650,000 where the unused threshold of a spouse or civil partner who died first is being transferred in full.
2. Exempt estates. The gross value is below £3 million, and after deducting spouse, civil partner or charity exemptions the net chargeable value falls within the nil-rate band. This is how a £2 million estate left entirely to a surviving spouse can still avoid the full account.
3. Foreign domiciliaries. The person lived permanently outside the UK when they died and their UK assets are worth £150,000 or less.

The side conditions that trip people up

Meeting a headline threshold is not enough. HMRC's Inheritance Tax Manual (IHTM06012 for low value estates, IHTM06013 for exempt estates) adds conditions that all have to be satisfied:

• Lifetime gifts ("specified transfers") of no more than £250,000. This covers chargeable gifts of cash, quoted shares, land and certain other assets in the seven years before death. Go a pound over and the estate is not excepted, even if no tax is due.
• No gift with reservation of benefit. If the deceased gave an asset away but kept using it, the classic example being the house signed over to the children while the parent carried on living there rent free, the excepted route is closed.
• Trust limits. For a low value estate, trust assets must sit in a single trust with a gross value of no more than £250,000. For an exempt estate the single trust can hold up to £1 million gross, provided the net chargeable value after spouse or charity exemptions is no more than £250,000.
• Foreign assets of no more than £100,000 for UK-domiciled estates in either category.

Two further points push otherwise simple estates into IHT400 territory. A claim for the residence nil-rate band (the extra allowance of up to £175,000 where a home passes to direct descendants) can only be made through the full account, with its supporting schedules. And the excepted route only accommodates a transferred nil-rate band where the first spouse's allowance is unused in full; if the first estate used part of it, a partial claim needs IHT400 as well. In both cases the estate may end up paying nothing, yet the full account is still the correct paperwork.

Step 2 (excepted): report the values on the probate application

If the estate qualifies, there is no IHT form to file. Instead, GOV.UK's probate guidance requires three inheritance tax figures on the application, form PA1P where there is a will or PA1A where there is not:

• the gross estate value for IHT: everything the person owned at death, including their share of joint assets and relevant gifts;
• the net estate value for IHT: the gross value minus debts, funeral costs and other allowable expenses;
• the net qualifying value for IHT: the net value after deducting spouse, civil partner and charity exemptions, which is the figure tested against the threshold.

You will also calculate separate gross and net values "for probate", which count only the assets that actually pass under the grant. Keep your valuation workings: HMRC can still ask questions about an excepted estate after the grant issues, so the discipline of valuing everything properly has not gone away, only the form has. If you are not sure the estate needs a grant at all, our do I need probate checker covers that prior question, and our probate pillar guide walks the whole process end to end.

Step 2 (not excepted): the IHT400 route

GOV.UK's IHT400 page states the rule plainly: you must complete IHT400 "if there's Inheritance Tax to pay, or the deceased's estate does not qualify as an excepted estate". The main account runs to some 16 pages, supported by numbered schedules for particular assets and claims: IHT402 for a transferred nil-rate band, IHT435 and IHT436 for the residence nil-rate band, IHT403 for gifts, IHT413 and IHT414 for business and agricultural relief, among others.

Timing matters on this route:

• The account must reach HMRC within 12 months of the death, and in practice you deal with it before applying for probate, per GOV.UK's reporting guidance.
• Any tax is due by the end of the sixth month after death to avoid interest, which usually means paying (or starting instalments) well before the paperwork cycle finishes. Banks can often pay HMRC directly from the deceased's accounts before probate under the Direct Payment Scheme.
• Since January 2024, applicants in England and Wales need a unique code from HMRC before they can apply for probate on an IHT400 estate. HMRC issues the code once it has processed the account, so the sequence is fixed: IHT400 first, code second, probate application third.

IHT400 is genuinely more work: full valuations, schedule cross-referencing and a running tax calculation. Many executors handle an excepted estate themselves and take professional help for the full account; our guide on whether you need a solicitor for probate weighs that decision honestly.

The walkthrough in one decision path

1. When did the person die? On or before 31 December 2021: the old rules apply, and IHT205 (with IHT217 for a transferred allowance) is still the correct form for a non-taxpaying estate. On or after 1 January 2022: continue below and forget IHT205 exists.
2. Value the estate. Gross everything up: sole assets, share of joint assets, gifts in the last seven years. Our inheritance tax threshold guide explains the allowances this figure is tested against.
3. Is there tax to pay? If yes, it is IHT400, always.
4. If no tax, test the excepted conditions. Under £325,000 gross (or £650,000 with a full transferred allowance), or under £3 million with everything passing to a UK spouse, civil partner or charity? Gifts within £250,000, foreign assets within £100,000, trusts within the limits, no gift with reservation, no residence nil-rate band claim, no partial transferred allowance? Pass every test and the estate is excepted.
5. Excepted: put the gross, net and net qualifying values on PA1P or PA1A and apply for probate. No IHT forms.
6. Not excepted: complete IHT400 and schedules, deal with any payment, wait for HMRC's unique code, then apply for probate.

A quick illustration of each fork. An estate of £430,000 left by a widow whose husband never used any of his allowance: the transferred nil-rate band lifts the threshold to £650,000, gifts were £10,000, no trusts, no foreign assets. Excepted; three values on the PA1P and done. Now the same widow, but she gave her daughter £300,000 towards a house four years before she died. No tax may be due once the allowances are applied, but specified transfers exceed £250,000, so the estate fails the excepted test and the executors must file IHT400 with the gifts schedule IHT403.

Why the wrong route costs you months

The probate registry checks the IHT figures on every application. Enter excepted estate values for an estate that needed the full account and the application will stall; you then start the IHT400 cycle from scratch, adding HMRC's processing time on top of what you have already lost. In the other direction, filing IHT400 for a plainly excepted estate wastes weeks of valuation and form-filling for nothing. Executors are personally responsible for getting this right, which is why the qualifying conditions deserve careful reading before any form is opened. Our executors hub collects the duties in one place, and the inheritance tax pillar guide covers the allowances and reliefs behind the thresholds. Note that business relief and agricultural relief claims are made on the IHT400 schedules too, so estates relying on those reliefs need the full account even when the relief wipes out the bill.

If the estate sits near a threshold, involves gifts, trusts or foreign assets, or needs a residence nil-rate band claim, get the route confirmed before you file anything. A rejected application does not just bounce back; it puts you at the back of two queues, the registry's and HMRC's, and estates have lost whole seasons to that round trip. A probate specialist can check the estate against the excepted conditions with you and, where IHT400 turns out to be needed, take the schedules off your hands; we can put you in touch.