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This guide answers common questions about insurance policies on the Inheritance Tax ‘Return of Estate Information’ forms IHT205 and C5.
Most people’s life insurance policies pay out to their estate if they die. If this was the case for the deceased, you can answer ‘no’ to question 6 and move on.
However, the estate won't be an excepted estate if either of the following applies. The deceased:
In this case you’ll have to fill in a full Inheritance Tax account instead - form IHT400.
Provided by HM Revenue and Customs