Do I need probate if there is no inheritance tax to pay?
Very possibly. Whether tax is due and whether a grant is needed are two different questions with two different answers. Most estates that need a grant owe no tax at all.
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The short answer
- Inheritance tax and probate are unrelated tests. Tax depends on the value passing and to whom; probate depends on how each asset was held and each holder's limit.
- Most estates owe no inheritance tax, because they fall within the £325,000 allowance, pass to a spouse, or qualify for the residence allowance. A large share of those estates still need a grant.
- Where no tax is due, the application is simpler. An "excepted estate" declares its values on the probate form itself; no separate account goes to HMRC.
- Where tax is due, it usually has to be paid before the grant is issued. That is the one place the two connect.
- The values are needed either way. Even with no tax and no grant, keep them; a surviving spouse's estate will need them later.
Two different questions
Is inheritance tax due? Add up everything the person owned, including their share of joint assets, pensions from April 2027, and gifts made in the last seven years. Take off debts. Take off anything passing to a spouse, civil partner or charity. If what is left is above the nil-rate band (£325,000) plus, where a home passes to children or grandchildren, the residence nil-rate band (£175,000), plus any unused allowance from a spouse who died first, tax is due at 40 per cent on the excess.
Is a grant needed? Look at each asset on its own. Sole-name property, a tenants-in-common share, or a sole-name account above the holder's limit means yes. Everything joint or within the limits means no. See the checker.
The two tests share no inputs except the list of assets. A £600,000 house left to a spouse pays no tax and, if it was jointly owned, needs no grant; the same house in the deceased's sole name pays no tax and needs a grant. A £2 million estate of joint assets passing to a spouse pays no tax and may need no grant. A £30,000 flat left to a nephew pays no tax and needs a grant.
Excepted estates
Since 1 January 2022, most estates with no tax to pay are "excepted estates" and no longer send a separate return (the old IHT205) to HMRC. Instead the executor declares the gross and net values of the estate, and the amount of any transferable allowance claimed, within the probate application. HMRC can ask questions afterwards but usually does not. An estate is excepted if, broadly, it is worth under £325,000, or under £650,000 with a full transferred allowance from a spouse, or is worth under £3 million but is left mostly to a spouse or charity, and it has no complicating features such as large lifetime gifts or foreign assets.
If the estate is not excepted, even where no tax ends up being due (for instance because the residence allowance takes it below the threshold), the executor must send a full IHT400 account to HMRC and wait for HMRC's reference before applying for probate. Allow several weeks for that.
Where tax and probate do connect
- Timing. Where tax is due, at least the tax on non-property assets must normally be paid, and HMRC's reference obtained, before the probate registry will issue the grant. Banks will pay the tax directly to HMRC from the deceased's frozen account under the Direct Payment Scheme, which solves the obvious circularity.
- Deadlines. Inheritance tax is due six months after the end of the month of death, whether or not a grant has been applied for; interest runs after that. The IHT400 must be delivered within twelve months.
- Values. The probate application asks for the same date-of-death values the tax calculation uses. Doing the valuation once, properly, serves both.
- Records for the second death. Where everything passed to a spouse and no tax or grant was needed, the spouse's executors will one day claim the unused allowances. HMRC asks for the first estate's figures. Keep them.
Common questions
If there is no inheritance tax, do you still need probate?
Often, yes. Whether a grant is needed depends on the assets and how they were held, not on tax. Most estates in England and Wales owe no inheritance tax, and a large proportion of them still need a grant, typically because there is a house in the deceased's sole name.
What is an excepted estate?
An estate with no inheritance tax to pay that meets HMRC's conditions, broadly under £325,000 (or £650,000 with a full transferred allowance), or under £3 million where most passes to a spouse or charity, without complications. Since 2022 an excepted estate reports its values on the probate application rather than on a separate form.
Do I need to fill in an IHT form if no tax is due?
Not the old IHT205, which was abolished for deaths from 1 January 2022. If the estate is excepted, the values go on the probate application. If it is not excepted, a full IHT400 must be sent to HMRC even where the final tax is nil, and you must wait for HMRC's reference before applying for the grant.
Does leaving everything to my spouse avoid probate?
It avoids inheritance tax. It does not avoid probate: a grant is still needed for any asset in the deceased's sole name above the holder's limit, and for sole-name property. Assets held jointly as joint tenants pass to the spouse without a grant, which is why many first deaths between spouses need neither tax nor probate.
When does inheritance tax have to be paid?
By the end of the sixth month after the month of death, regardless of when the grant is applied for. Interest runs from then. Tax on land can be paid in ten annual instalments. Where tax is due, it is normally paid before the grant is issued, often directly from the deceased's bank account to HMRC.
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Important
Solace is not a firm of solicitors and does not provide legal, tax or financial advice. We are an estate administration service and we are not regulated by the Solicitors Regulation Authority, the Financial Conduct Authority or any equivalent body. Nothing in this guide constitutes legal, tax or financial advice, and no solicitor–client relationship is created by reading it.
This article is general information only. It reflects the position in England and Wales at the date shown above; the law and the figures change, and Scotland and Northern Ireland differ in important respects. It may not apply to your circumstances. Whether a particular estate needs a grant is ultimately decided by the organisations holding the assets, and their limits change. Administering an estate carries personal legal responsibility, and you should obtain advice from a qualified solicitor, accountant or other regulated professional where appropriate. Always check current rates, fees and deadlines against GOV.UK before acting.