ARTICLE
1 November 2021

HMRC And Excepted Estates

AG
Albert Goodman

Contributor

Albert Goodman
HMRC has announced that the thresholds for excepted estates (i.e. those which pay no inheritance tax and need not complete a full IHT return)...
United Kingdom Family and Matrimonial

HMRC has announced that the thresholds for excepted estates (i.e. those which pay no inheritance tax and need not complete a full IHT return) will increase from 1 January 2022 in England, Wales and Northern Ireland. The main changes are:

  • raising the threshold gross value of an excepted estate from £1million to £3million;
  • raising the value threshold of an excepted estate's chargeable trust property from £150,000 to £250,000, although the total amount of trust property including exempt amounts is limited to £1million;
  • increasing the value limit in relation to specified lifetime transfers from £150,000 to £250,000;
  • amending the definition of 'IHT threshold' to include the unused nil-rate band transferred from the estate of first deceased spouse/civil partner;
  • removing excepted status from estates of foreign persons where the deceased either owned indirect interests in UK residential property or made lifetime gifts of UK assets above £3,000 in the seven years before death, unless the estate is not liable for IHT.

The deadline for executors having to reply to HMRC's requests for proof of excepted estate qualification will also been extended from 30 to 60 days.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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