Excepted and exempt estates

To complete the forms for a grant of representation form it is needed first of all for the administrator/executor to determine if the estate qualifies either as a ‘excepted’ or ‘exempt and excepted’ estate. It may not fall under any. Knowing which category to place this estate in will dictate you on how to fill forms in for the grant and IHT forms for the HMRC

​In regards to IHT the value of the estate for the grant of representation is only one part of the gross estate. If the deceased made any large gift or received a large income from a trust for example this could lead to a tax liability even if the estate does not go over the IHT threshold.

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Example of an excepted estate and an exempt and excepted estate

Who can administer the estate?

Exempted estate - The gross estate does not exceed the IHT threshold which is currently £325,000

Exempted and Excepted estate - The collective value of the gross estate is less than £1,000,000 and it is passed either to the deceased’s spouse (living in the UK) or to a charity. Other bodies do qualify but they must be exempt from IHT. After deducting liabilities and these exemptions and the estate is less than £325,000

For both categories the below conditions apply:

1. Any specified transfers, of which their chargeable value does not exceed £150,000 See bottom of list for definition of specified transfers

2. If the deceased holds assets within a trust for IHT purposes and this is classed as part of their estate and the total value does not exceed £150,000.

3. If the deceased has foreign assets and the total does not exceed £100,000

4. The deceased did not give away any property while retaining the benefit of it

5. The deceased had elected that the income tax charge should not apply to:
(a) assets he previously owned in which he retained a benefit or
(b) the deceased’s contribution to the purchase price of the assets acquired by another person but in which the deceased retained a benefit

6. The deceased did not benefit from an alternatively secured pension fund

7. The deceased did not benefit under a registered pension scheme where
(a) the benefit was unsecured
(b) they became entitled to the benefit as a relevant dependent of a person who died aged 75 or over.