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Managing an estate after the death of a loved one can be tricky to navigate. There is a simplified process of applying for probate which can be followed when an estate is regarded as an ‘excepted estate’. This blog explains what qualifies as an ‘excepted estate’ and what it means in terms of applying for probate.
What is an ‘excepted estate’?
Excepted estates are those estates in England and Wales where a full inheritance tax account is not required to be completed and submitted to HM Revenue and Customs by the personal representatives (i.e., the Executor or Administrator). It is often (but not always) the case that where there is no inheritance tax to pay, it will be excepted.
When is an estate classed as excepted?
The three main considerations for classing an estate as excepted are if: the estate is low in value, is exempt, or if the deceased was not considered domiciled in the UK.
Low in Value Estates:
These estates must be below the Nil Rate Band threshold which is currently £325,000 or £650,000 when claiming to transfer a predeceasing spouses unused threshold. Additionally, if assets are held in one trust worth £250,000 or less, the estate will also be classed as a low value excepted estate.
Exempt Estates:
This is when all the deceased’s assets passed to a surviving spouse, civil partner or qualifying charity and the estate is worth less than £3 million.
Foreign Domiciled Estates:
Where the deceased lived permanently outside of the UK and their UK assets are worth below £150,000, their estate will be excepted.
Applying for the Grant of Representation where an estate is considered excepted:
Helpfully, where an estate is excepted, the process of applying for probate is much simpler.
Where the deceased died on or after 1 January 2022, the application can be done online via the online probate system. There are certain circumstances in which you need to apply via post using form PA1P if there is a Will or PA1A is there is no Will. For example, you will need to submit a PA1P where there is no Will and more than one person is entitled to apply for the Grant of Probate or where the original Will cannot be located, and you are applying for probate with a copy or draft Will.
If a deceased died on or before 31st December 2021, a form IHT205 must be completed and sent to the Probate Registry in support of the application. This is the old system and is being phased out.
Conclusion
Ensuring that the estate is classified properly and understanding the requirements for applying for probate are crucial for managing an estate effectively. Consulting with legal professionals can provide invaluable guidance in these matters, ensuring compliance and easing the administrative process. Please contact our Private Client Solicitor, Lara Thomas (Lthomas@astonbond.co.uk), or one of our Private Client Paralegals, Emma Wallace (Ewallace@astonbond.co.uk) or Stacey Clark (Sclark@astonbond.co.uk) to make an appointment, should you require any assistance with the probate process or administering an estate.
