Inheritance Tax Planning Action Required
- Brian Pusser
- 3 days ago
- 9 min read
Published 2 July 2026
HMRC has issued a reminder that some estates may need to be reviewed following changes to the inheritance tax rules for excepted estates.
The changes came in from 1 January 2025. They widened the circumstances where an estate may be treated as an excepted estate. This means that, in more cases, families may not need to submit a full inheritance tax account to HMRC.
For many people, this is helpful. It can reduce paperwork at an already difficult time. But HMRC is now warning that some estates may have been treated incorrectly under the new rules.
If you are dealing with the estate of someone who has died, this matters. An estate that is wrongly treated as excepted could lead to incorrect information being sent to HMRC. It could also delay probate or create problems that need to be corrected later.
Your accountant may need to review the estate to make sure the right process has been followed.
Why the inheritance tax reminder matters
The new rules are designed to make things easier for families. But easier does not always mean simple.
An excepted estate is one where a full inheritance tax account is not usually required. Instead, the personal representatives can often provide the required information as part of the probate application.
This can save time. It can also reduce the amount of formal paperwork needed.
However, the estate must still meet the correct conditions. If it does not, the simplified process should not be used.
This is why HMRC is asking for checks to be made. It wants to make sure that estates dealt with under the revised rules have been classified correctly.
For families, the key point is this: if an estate has been handled since 1 January 2025, it may be worth checking whether the excepted estate rules were applied properly.
What is an excepted estate?
An excepted estate is an estate where HMRC does not normally need a full inheritance tax return.
In simple terms, the estate may be straightforward enough that detailed inheritance tax reporting is not needed.
This does not mean inheritance tax has been ignored. It means the estate falls within rules that allow a simpler reporting process.
The personal representatives still need to give accurate information. They still need to value the estate properly. They still need to include relevant assets, debts, gifts and other important details.
The difference is that, where the estate qualifies, the information can often be included in the probate application instead of being submitted through a full inheritance tax account.
This can make the process less stressful. But it only works if the estate really qualifies.
What changed from 1 January 2025?
From 1 January 2025, the rules were widened so that more estates can qualify as excepted estates.
This means more families may be able to avoid submitting a full inheritance tax account to HMRC.
The aim is to reduce unnecessary administration. Many estates are relatively simple. Where there is clearly no inheritance tax to pay, or where the estate falls within the allowed conditions, it may not be practical to require full reporting.
This is a positive change for many people. But it also creates a risk.
Because more estates now fall into the simplified regime, there is a greater chance that some may be wrongly treated as excepted.
That is the concern behind HMRC’s reminder.
If the rules are misunderstood, personal representatives may believe they can use the simpler process when they actually need to submit the correct inheritance tax forms.
Why could an estate be treated incorrectly?
An estate may look simple at first but still contain details that affect the inheritance tax position.
For example, the estate may include overseas assets. The person who died may have made lifetime gifts. There may be jointly owned property, trust arrangements, business assets or other ownership issues.
These factors can change the way the estate should be reported.
The problem is that these details are not always obvious at the start. Family members may not have full records. They may not know about previous gifts. They may not realise that certain assets need to be included.
This is why a careful review is important.
It is better to identify issues early than to correct mistakes later after probate has been delayed or the wrong information has gone to HMRC.
Estates with overseas assets
One area that needs particular care is where the person who died owned assets outside the UK.
This might include:
A holiday home abroad
Foreign bank accounts
Overseas investments
Land or property in another country
Business interests outside the UK
Overseas assets can complicate the inheritance tax position. They may also affect whether the estate qualifies as excepted.
Families may not always think to include these assets, especially if they are small or have not been used for some time. But they can still matter.
There may also be questions about the value of the overseas asset, the ownership position, and whether any foreign tax rules apply.
If an estate includes assets outside the UK, it should be checked carefully before assuming that the simplified process is available.
Lifetime gifts and transfers
Another important area is lifetime gifts.
A lifetime gift is something the person gave away before they died. This could include money, property, shares or other valuable assets.
Some gifts can affect the inheritance tax position. They may need to be considered when deciding whether the estate qualifies as excepted.
For example, the person may have given money to children or grandchildren. They may have helped someone buy a house. They may have transferred an asset into joint names. They may have made regular gifts from income.
Not every gift creates a tax problem. But the details matter.
You may need to know:
What was given
When it was given
Who received it
How much it was worth
Whether any exemptions apply
Whether records are available
This is one of the reasons personal representatives should not rush the process. If gifts are missed, the estate may be reported incorrectly.
Complex ownership arrangements
Some estates involve assets that are not owned in a simple way.
This can include jointly owned property, business assets, partnerships, trusts, or assets held with other family members.
These arrangements can affect inheritance tax reporting.
For example, if the person owned a share of a property, the value of that share needs to be considered. If they were involved in a business, the value of their interest may need to be reviewed. If assets were held in trust, the trust position may need separate attention.
This does not automatically mean the estate cannot be excepted. But it does mean the position needs to be checked properly.
The more complex the ownership, the more important it is to get the reporting right.
What happens if the estate is wrongly treated as excepted?
If an estate is incorrectly treated as excepted, several problems can follow.
The wrong information may be provided to HMRC. Probate may be delayed. Further forms may need to be prepared. Personal representatives may need to correct the position later.
This can be stressful, especially when families are already dealing with bereavement.
There may also be questions from HMRC if the figures do not match the true position. If inheritance tax should have been reported differently, this may create further work and uncertainty.
The main risk is not just the tax itself. It is the time, pressure and difficulty caused by having to fix mistakes later.
That is why HMRC is encouraging reviews now.
What should personal representatives check?
If you are a personal representative, executor or administrator, you should make sure the estate has been reviewed properly.
Key points to check include:
Has the full estate been valued correctly?
Have all bank accounts, investments and property been included?
Are there any overseas assets?
Were any lifetime gifts made?
Are there trusts or complex ownership arrangements?
Have debts and liabilities been recorded accurately?
Has the correct inheritance tax process been followed?
Have the correct forms been used where required?
You do not need to deal with this alone. Your accountant can help check whether the estate qualifies as excepted or whether further reporting is needed.
Why valuations are important
Estate valuations are important because inheritance tax reporting depends on accurate figures.
Property should be valued carefully. Bank balances should be checked at the date of death. Investments should be valued properly. Personal possessions may also need to be considered.
Debts and funeral costs may reduce the value of the estate, but they need to be recorded correctly.
If values are guessed or incomplete, the estate may be wrongly classified.
This is especially important where the estate is close to a threshold or where there are assets that are difficult to value.
A proper review gives personal representatives more confidence that the probate application and any inheritance tax information are correct.
The role of your accountant
Your accountant may need to act if an estate has been dealt with under the revised rules.
This may involve checking the estate file, reviewing the values used, looking at gifts, confirming whether overseas assets exist, and making sure the correct inheritance tax forms were completed.
This does not mean anything has gone wrong. It simply means HMRC has asked for care to be taken following the rule changes.
If the estate was correctly treated as excepted, no further action may be needed.
If the estate was not correctly treated as excepted, it may be better to identify this sooner rather than later.
A review can help avoid delays, reduce the risk of errors, and give families more certainty.
Why this matters for beneficiaries
Beneficiaries often want the estate to be completed as quickly as possible. Delays can cause frustration, especially if money or property cannot be distributed until probate is granted.
Incorrect inheritance tax reporting can slow everything down.
If further information is needed, the personal representatives may have to go back through bank statements, property details, gift records and correspondence. This can take time.
A careful review at the start can help prevent these problems.
It can also give beneficiaries reassurance that the estate has been dealt with properly.
Why the simplified rules are still useful
It is important to say that the expanded excepted estate rules are not bad news.
For many families, they are helpful. They can reduce paperwork and make probate simpler.
The key is making sure the rules are used correctly.
If an estate qualifies, the simplified process can save time and reduce administration.
If an estate does not qualify, the correct inheritance tax forms should be submitted.
The aim is not to make the process more difficult. The aim is to avoid mistakes that could create bigger problems later.
When should you ask for help?
You should consider getting help if you are unsure about any part of the estate.
This is especially important if:
The estate includes property
There are overseas assets
The person made gifts before death
There are business interests
There are trusts involved
There are jointly owned assets
The family situation is complicated
You are not sure which inheritance tax forms are needed
It is also worth asking for help if you simply want peace of mind.
Estate administration can be emotional and time-consuming. Clear advice can make the process easier to manage.
Practical steps to take now
If you are dealing with an estate, take time to gather the right information.
Start with a full list of assets and debts. Include property, savings, investments, pensions, personal possessions, loans, credit cards and funeral costs.
Then check whether there were any lifetime gifts. Speak to close family members if needed. Look for bank transfers, written notes or records of large payments.
Next, consider whether there are any overseas assets or complex ownership arrangements.
Once you have this information, your accountant can help decide whether the estate qualifies as excepted or whether further inheritance tax reporting is needed.
Do not assume that a simple-looking estate automatically qualifies.
A review now could prevent problems later
HMRC’s reminder is a useful prompt for families and personal representatives.
The rules changed from 1 January 2025, and more estates can now use the simplified excepted estate process. But that process must be used correctly.
If an estate has been wrongly treated as excepted, it may be easier to correct the issue now than later.
A review can help confirm:
Whether the estate qualifies as excepted
Whether the right information was included
Whether the correct forms were used
Whether any inheritance tax issues need further attention
This can reduce the risk of delays and give everyone involved more confidence.
Get More Help From BR Pusser & Co Ltd
Understanding inheritance tax and the excepted estate rules can make a significant difference to how smoothly probate is handled, what information must be sent to HMRC, and whether delays or errors arise later.
By checking whether an estate has been correctly treated as an excepted estate, reviewing lifetime gifts, overseas assets, property values and ownership arrangements, you can reduce the risk of unexpected HMRC queries and avoid unnecessary stress for the family.
If you are dealing with an estate, applying for probate, or you are unsure whether the correct inheritance tax forms have been completed, B R Pusser & Co Ltd is here to help.
We provide tailored support for individuals, families and business owners, helping you understand the inheritance tax position clearly and deal with estate reporting correctly.
We can also assist with will writing and completing Lasting Power of Attorney documents, helping you put the right plans in place for the future and protect your family’s interests.
Contact us today to discuss your inheritance tax, probate, will writing or power of attorney needs and put a clear, practical plan in place.
You can book a consultation with Brian or get in touch through our contact us page.
