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HMRC internal manual

Inheritance Tax Manual

Rules about excepted estates: what is not an excepted estate

There are instances when an estate cannot qualify as an excepted estate, regardless of the value. These are:

  • where the deceased held an interest in possession (IHTM16060) in more than one item of settled property (IHTM16041)
  • for deaths on or after 1 September 2006 where a charge arises under IHTA1984 S. 151A-C (IHT charge on an alternatively secured pension fund),
  • where , on or after 18 March 1986, the deceased made a gift with reservation of benefit and either:

    • the reservation still subsists at the death (IHTM04072), or
    • the property ceased to be subject to the reservation within the seven years before the death - (unless this constituted a specified transfer (IHTM06018),
  • where the deceased has elected that property should be treated as part of their estate for IHT rather than pay a pre-owned asset charge,
  • where the deceased is regarded as deemed domiciled (IHTM13024) in the UK under the provisions of IHTA1984 S.267.