In short

House contents are part of the estate and must be included at their open market value on the date of death. A professional valuation is optional, but GOV.UK says you can get one for anything worth over £1,500; ordinary household goods can be estimated. Insurance values are usually too high for probate.

This guide covers England and Wales

The figures and forms come from GOV.UK and HMRC guidance, linked as we go. If the estate is complicated or disputed, talk to a solicitor.

What does “open market value” mean?

It is the price something would fetch if it were sold on the open market at the date of death. The law behind it is section 160 of the Inheritance Tax Act 1984: “the price which the property might reasonably be expected to fetch if sold in the open market at that time”.

That is not what it would cost to replace, and it is not what it meant to the family. A sideboard that was expensive in 1975 and is now unfashionable is valued at what a buyer would pay for it today.

How is a probate valuation different from an insurance valuation?

Insurance valuations usually use replacement values. HMRC’s guidance says that a valuation “for insurance purposes” using replacement values may include too high a value. If the family has an old insurance schedule, it is a useful list of what was there, but not a source of probate values.

Do the contents have to be valued at all?

Yes. GOV.UK includes “household and personal items, including antiques, electrical goods, furniture, jewellery, paintings, and stamp collections” among the assets you value. Estates below the Inheritance Tax threshold are usually what GOV.UK calls excepted estates, where you don’t have to send full details of the value to HMRC if no tax is due. But GOV.UK also says that if you apply for probate you must report an estimate of the value, even then.

When is a professional valuation worth having?

GOV.UK says you can get a professional valuation for anything worth over £1,500. It doesn’t say you must. Jewellery, paintings, collections and antiques are the usual candidates. For everyday furniture, crockery and linen, GOV.UK’s approach is to work out what you would have got if you’d sold the items, and it says you can search for similar items on online marketplaces.

If you aren’t sure which things deserve a written valuation, a free verbal valuation is a sensible first step. Mark can tell you what is likely to be worth putting in writing. Ring him on 07764 405701.

Which form does HMRC want?

HMRC’s form IHT407 records household and personal goods, and is used together with form IHT400. HMRC’s guidance says to attach a copy of any professional valuation you have obtained. Where there is no professional valuation, you give the values of the items yourself.

What are the deadlines?

If the estate owes Inheritance Tax, GOV.UK says you must report its value within one year using form IHT400. You must pay by the end of the sixth month after the person dies to avoid paying interest, and you’ll normally have to start paying before probate is granted.

The Inheritance Tax threshold is £325,000 and the standard rate is 40%, charged only on the part above the threshold. Rules change, so we note the date we last checked at the top of this guide.

What if things sell later for a different price?

HMRC’s guidance says that sales after the death, “particularly those at auction, provide the best evidence of the open market value”. The auction price to use is the hammer price, before commission and without any buyer’s premium added. If a final sale price differs from your reported value, GOV.UK says to tell HMRC once the values are final or 18 months after the person died, whichever is sooner. You should also report it if the estate’s value goes up or down by more than £50,000 (before any exemptions or reliefs) while the values aren’t final.

Can the costs of valuing and selling be deducted?

No. HMRC’s guidance says that any costs incurred after the date of death are administration expenses and therefore not deductible from the value of the goods. That covers valuation fees and selling costs.

What should a good written valuation contain?

  • A full inventory of the items, room by room, with a value against each.
  • Realistic market values, not replacement values.
  • The basis stated plainly: open market value.
  • The date of death, so it is clear the values are as at that date.
  • The name and experience of the person who prepared it.

That list is our own practical advice. HMRC does not prescribe a layout, but its guidance says that where a professional valuation states it has been prepared on the basis of open market value, it will usually be able to accept it.

How do Shelbys’ probate valuations work?

Written valuations for probate, estate or insurance are carried out by Mark, who has over 45 years’ experience in the antiques trade. They are chargeable, with the fee paid at the visit. We work with solicitors, executors and family members. See our page on probate valuations in Leeds for what the service includes, or the page for solicitors, executors and estate agents.

If you’re also facing the house itself, our guide to clearing a parent’s home after a death covers what to do and in what order.

Common questions

What happens if HMRC checks the values?

HMRC may check what you reported. GOV.UK says that if you’ve not heard from HMRC 14 weeks after submitting your IHT400, no further checks will be carried out. A valuation that states its basis is easier for HMRC to accept.

Is the hammer price or the price with buyer’s premium used?

The hammer price. HMRC’s guidance says the auction sale price is the gross proceeds of sale (the hammer price) before deduction of commission, without the addition of any buyer’s premium.

Do I need a valuation if the estate is an excepted estate?

You don’t send full details of an excepted estate’s value to HMRC if there is no tax to pay. But if you apply for probate you still have to report an estimate of the value, so you still need to work out what the contents are worth.