Two questions arrive together and are answered in the wrong order. Executors ask how much tax is owed, when the first question is whether HMRC needs to hear from them at all. For most estates it does not: they are excepted estates, ones that never send full details to HMRC. This page is the sequence: which estates report, what the forms want, and when the money is due.
The thresholds that decide it
GOV.UK says there is normally no Inheritance Tax to pay if the value of the estate is below the £325,000 threshold, and that the standard rate is 40% on the part above it (GOV.UK, How Inheritance Tax works: thresholds, rules and allowances: Overview, checked 1 November 2026). Where the home goes to children, including adopted, foster or step-children, or to grandchildren, GOV.UK says the threshold can increase to £500,000.
The £500,000 is the £325,000 plus a £175,000 residence threshold. HMRC’s rates table shows the £325,000 held to 5 April 2031 and the £175,000 to 5 April 2030, (HMRC rates and allowances, Inheritance Tax thresholds and interest rates, checked 1 November 2026). The residence part is reduced by £1 for every £2 an estate is worth above £2 million (GOV.UK, checked 1 November 2026). A spouse’s unused threshold transfers: GOV.UK says the basic allowance on the second death can be as much as £650,000 (GOV.UK, Transferring unused basic threshold for Inheritance Tax, checked 1 November 2026). Separately, where 10% or more of the net estate, but not all of it, goes to charity, GOV.UK says the rest can be taxed at a reduced rate of 36% (GOV.UK, How Inheritance Tax works: thresholds, rules and allowances: Overview, checked 1 November 2026).
Excepted estates send nothing to HMRC
GOV.UK says an estate is usually excepted in three cases. Its value is below the threshold. Or it is worth £650,000 or less and an unused threshold is being transferred from a spouse or civil partner. Or everything was left to a spouse or civil partner, or to a qualifying charity, and the estate is worth less than £3 million.
The spouse must be living in the UK (GOV.UK, checked 13 September 2026). A person who lived permanently abroad with UK assets of £150,000 or less is the fourth kind.
For an excepted estate GOV.UK says you report its estimated value on the probate application, which goes to the probate registry, even though there is no tax to pay. If you do not need probate, you do not need to report the value at all. No form goes to HMRC. Form IHT205, which older guides still mention, is for deaths between 6 April 2011 and 31 December 2021 (GOV.UK, checked 1 November 2026).
What breaks the exception
GOV.UK lists the facts that require full details even where there is no tax to pay. The person gave away over £250,000 in the seven years before they died. They gave gifts and continued to benefit from them. They left an estate worth more than £3 million, or had foreign assets worth more than £100,000.
Being deemed domiciled in the UK, which means treated as UK-based for tax despite living abroad, is on the same list (GOV.UK, checked 13 September 2026).
Trusts break it too: gifts put into trusts, assets worth over £250,000 held in trust, or more than one trust. Whether tax is due at all is on our Inheritance Tax hub. The seven-year gift figure is the one families overlook, and our gifts and the 7-year rule page explains which gifts count. The gifts timeline lays a family’s own gifts against the date.
When form IHT400 is needed
Where the estate is not excepted, GOV.UK says you must report the full details of the estate and its value to HMRC by completing form IHT400. Full details means the assets and debts, any gifts made, and any reliefs and exemptions; GOV.UK says to send any relevant additional pages (schedules) with the form (GOV.UK, If Inheritance Tax is due or full details are needed, checked 1 November 2026).
It must be submitted within 12 months of the person dying and before applying for probate.
Then a wait. GOV.UK says HMRC will send a unique code confirming you have paid enough tax, usually within 20 working days of receiving the IHT400 or the payment, whichever is later. You need the code to apply for probate in England and Wales or confirmation in Scotland. In Northern Ireland, form IHT421 goes in with the IHT400, and HMRC fills in its part of the form and returns it (GOV.UK, If Inheritance Tax is due or full details are needed, checked 1 November 2026). Our probate deadline planner puts the IHT400 date in the calendar.
When the tax is due
GOV.UK says you must pay Inheritance Tax by the end of the sixth month after the person died, and its example is a death in January and payment by 31 July (GOV.UK, Pay your Inheritance Tax bill, checked 1 November 2026). HMRC charges interest after the due date; its rates table gives 7.75% for late payment from 9 January 2026.
Property, land and some shares can be paid for more slowly. GOV.UK says you can pay the tax on things that may take time to sell in equal annual instalments over 10 years. The first instalment is due at the end of the sixth month after the death, and you will usually have to pay interest on the instalments (GOV.UK, Pay your Inheritance Tax bill: in yearly instalments, checked 1 November 2026). Selling the property brings the balance due; our selling or transferring the home page covers that.
Paying before the grant
The tax comes before probate, and GOV.UK’s answer to the obvious problem is the Direct Payment Scheme. You can ask banks, building societies or investment providers to pay some or all of the tax from the deceased’s accounts, using form IHT423, one per account, and you can start this before you have probate (GOV.UK, From the deceased's bank, savings or investment account, checked 1 November 2026).
Two other rules. GOV.UK says you need an Inheritance Tax reference number from HMRC at least 3 weeks before you make a payment, requested online using form IHT422 (GOV.UK, Pay your Inheritance Tax bill and HMRC, Apply for an Inheritance Tax reference (IHT422), checked 1 November 2026). For a trust, form IHT122 is completed and posted to HMRC. And if you pay from your own bank account, GOV.UK says you can claim the tax back from the estate.
What comes off the value, and what does not
Debts are deducted. GOV.UK says they include utility bills, mortgages, money owed on credit cards and funeral expenses (GOV.UK, Identify assets and debts, checked 1 November 2026). HMRC’s notes to the IHT400 allow funeral costs and reasonable mourning expenses, and the cost of a headstone.
Debts owed jointly with someone else, such as a mortgage on a joint property, are not deducted (GOV.UK, Applying for probate: before you apply, checked 1 November 2026).
The notes are equally clear about what cannot be deducted: fees for professional services carried out after death, which means probate fees, any solicitor’s or estate agent’s fees and any valuation fees incurred in dealing with the estate (IHT400 notes, checked 1 November 2026). Neither GOV.UK nor the notes say how a pre-paid funeral plan is treated; ask HMRC’s helpline rather than assume.
Gifts, and gifts out of income
Gifts in the seven years before death go on schedule IHT403. It asks whether you are claiming that gifts should be treated as exempt as gifts out of income, and for the deceased’s income and expenditure for each year in which the gifts were made (IHT403, checked 1 November 2026).
Pensions, interest and rents on one side; bills, council tax, holidays and care fees on the other; the surplus is what the gifts had to come from.
It is the schedule executors find hardest, because the evidence is bank statements from years ago. Our gifts page explains the £3,000 annual exemption and the £250 small gifts rule that take the smaller gifts out before the schedule is reached.
Valuing what there was
GOV.UK says you can get property or land valued by an estate agent or chartered surveyor, and can get a professional valuation for anything worth over £1,500. Joint assets are divided: for a joint tenant with a spouse, divide by two; with other joint owners, divide by the number of owners and take 10% from the deceased’s share.
Both the valuation guidance and the joint-asset rule are on GOV.UK’s page on estimating the value of the estate (GOV.UK, Estimate the estate’s value, checked 1 November 2026).
Household goods go on schedule IHT407 at open market value at the date of death, with any individual item of jewellery valued at £1,500 or more listed on its own (IHT407, checked 1 November 2026). GOV.UK adds that values can be corrected later, and that HMRC must be told of final values within 18 months (GOV.UK, If Inheritance Tax is due or full details are needed, checked 1 November 2026). Our corrective account (C4) page covers how to tell HMRC once the account has already gone in, including the six-month rule and what can be saved up.
Changing who gets what
A will can be varied after death, and it can change the tax. GOV.UK says any changes must be completed within 2 years of the death, and that you do not need a formal document or deed: a letter that meets the conditions will do. The letter comes from the beneficiary giving something up.
If the variation means more tax is due, GOV.UK says a copy must go to HMRC within 6 months of making it (GOV.UK, Change a will after a death, checked 1 November 2026).
Where to ask
HMRC’s Inheritance Tax helpline is 0300 123 1072, Monday to Friday, 9am to 5pm (GOV.UK, Inheritance Tax: general enquiries, checked 1 November 2026). It answers questions about the forms and the rules, not whether a particular estate owes tax, which is what the forms decide.
Where the estate is large, professionally valued or has trusts in it, the fees a solicitor charges are not deductible, but the work is what the fee buys; our solicitor problems page covers what to expect from one.