How to value house contents for probate

For most estates, the contents of the house are a small part of the total. You still have to put an honest figure on them, and you can do that without spending more than you need to.

What value does HMRC want?

The law asks for the price the property might reasonably be expected to fetch if sold in the open market at the time of death. That's what a stranger would pay for the thing in the condition it was in on the date the person died.

It rules out a few numbers that families often reach for:

• What it cost new. A £2,000 sofa from ten years ago may be worth very little today.
• The insurance value. Insurance figures are based on the cost of replacing something, and HMRC's manual warns that a valuation "for insurance purposes" may be too high.
• What it means to you. Sentimental value doesn't count.

So the whole contents of an ordinary home often come to a few thousand pounds, sometimes less. That can feel wrong after a lifetime of collecting, but it's normal.

Do you need a professional valuer?

Not for everything. GOV.UK's guidance splits things roughly like this:

You don't have to get a professional valuation for most items, but it's the sensible choice when an item might be worth a lot, when Inheritance Tax is likely to be due, or when the family may disagree. It also protects the executor, who is responsible for the figures.

A probate valuer will usually walk through the house and give you a written report that goes into the file. Ask for a fixed fee in writing before they start, and ask whether they're a member of a recognised body such as RICS or NAVA Propertymark. Many local auction houses do probate valuations too.

If you're not sure whether anything is worth paying a valuer for, our guide to finding out what antiques are worth can help you decide. For silver, start by reading the hallmarks.

Valuing it yourself

1. 1Make a list, room by room. Note what each thing is, its condition and any marks or signatures. Photos are a big help here.
2. 2Pull out the things that might matter. Jewellery, watches, silver, paintings, antiques and collections need individual attention.
3. 3Find what similar items sold for. Sold prices are the evidence you want, rather than asking prices. eBay's "sold items" filter and auction archives such as the-saleroom.com are the usual places.
4. 4Give the rest a single realistic figure. A room of ordinary furniture doesn't need item-by-item research.
5. 5Write down how you got there. Note the date, the sources and who helped. HMRC can ask to see records up to 20 years after Inheritance Tax is paid.

Here's a made-up example for an ordinary three-bedroom house, to show the shape of it:

Form IHT407, line by line

You only fill in form IHT407 if the estate needs the full IHT400 account. It's worth reading anyway, because it shows you how HMRC thinks about contents. It has four sections:

• Jewellery. List each piece valued at £1,500 or more.
• Vehicles, boats and aircraft. Give the make, model, year, registration, condition and mileage.
• Antiques, works of art and collections. This covers things like antique furniture, paintings, sculpture and porcelain, and collections of books, stamps, coins, medals and wine.
• Other household and personal goods. Give one total. You don't have to list these items individually.

For each listed item there's a column asking whether it's been sold and, if so, when and for how much. Include a copy of any professional valuation you have.

HMRC also asks whether anything in the "other" total was individually listed on the household insurance policy. If so, you have to include a copy of the policy. That's a reason to dig out the insurance schedule early and check that nothing valuable has been left out.

Jointly owned contents go on form IHT404 instead.

If you sell things after the death

If you're selling things from the estate, the sale price matters. HMRC's manual says sales after the death, particularly at auction, provide the best evidence of open market value. If you've valued a painting at £400 and it sells for £2,000 a month later, expect to be asked about the difference. You may need to correct the figure.

Two details are easy to get wrong:

• The price that counts is the hammer price, before any commission or insurance is taken off and without the buyer's premium added.
• You can't deduct the auctioneer's commission or the valuer's fee from the value of the item. HMRC treats costs after the death as expenses of administering the estate.

HMRC's guidance tells you to report changes once the values are final, or 18 months after the death, whichever comes first. Before then you only need to report certain changes, including when the estate's value rises or falls by more than £50,000.

Does the contents value actually matter?

It depends on the size of the estate. Normally there's no Inheritance Tax to pay if the estate is below the £325,000 threshold, and that can rise to £500,000 when a home goes to children or grandchildren and the estate is under £2 million. Anything above the threshold is taxed at 40%.

So on an estate that's over the threshold, an extra £1,000 of contents means £400 of tax. On an estate well below it, the number won't change what anyone pays, but you still need a reasonable figure to apply for probate.

HMRC also checks whether the contents value looks consistent with the house and the rest of the estate, so a nominal £100 for the contents of a large home is likely to raise a question.

Common questions

How much does a probate valuation of house contents cost?

There's no standard fee. It depends on the size of the house and how much needs individual attention. Ask two or three valuers for a fixed price in writing. Some auction houses reduce or refund the fee if you then sell through them.

Can I value house contents for probate myself?

Yes, for most ordinary items. GOV.UK says you can estimate cheaper assets such as electrical items and ordinary household goods. For anything worth more than about £1,500, a professional valuation is the safer choice.

Is the probate value the same as the sale value?

It's meant to be close. The probate value is the open market value at the date of death, and a sale soon afterwards is usually strong evidence of what that value was.

What happens if I get the value wrong?

If you made a genuine mistake, correct it with HMRC when you find out. HMRC can charge penalties when a mistake is careless or deliberate, so keep a record of how you reached each number. The executor is responsible for what's declared.

Do I need to list every item?

No. On form IHT407 only jewellery of £1,500 or more, vehicles, and antiques, art and collections are listed individually. Everything else goes in as one total.

Sources

• HMRC: How we value household goods (IHTM21041)
• HMRC: Household and personal goods form (IHT407)
• GOV.UK: How to value an estate for Inheritance Tax
• GOV.UK: How Inheritance Tax works
• GOV.UK: If Inheritance Tax is due
• RICS (Royal Institution of Chartered Surveyors)
• NAVA Propertymark
• GOV.UK: Records to keep after valuing an estate
• HMRC: Penalties for inaccuracies (CH81000)

This guide is general information for people in England and Wales. The rules in Scotland and Northern Ireland can differ. It isn't legal, tax or financial advice, and Sortwell isn't a law firm or a valuer. If an estate is complicated or there's a disagreement, talk to a solicitor. Figures were checked on the date above.