What is being valued, and on what basis
When someone dies, their executor reports the value of the estate to HM Revenue and Customs. Household and personal goods go on form IHT407, which accompanies the full IHT400 return. HMRC’s guidance on valuing the estate sets out the steps.
The basis is open market value at the date of death. That is the price the goods would fetch if sold on the open market on that day, which in practice means at auction.
Three different numbers get attached to the same teapot, and only one of them belongs on the form.
| Figure | What it means | Relation to probate value |
|---|---|---|
| Open market value | What it would make at auction on the date of death | This is the probate figure |
| Insurance or replacement value | What it would cost to buy an equivalent from a dealer | Three to five times higher |
| Trade or dealer offer | What a dealer pays to buy it for resale | Below the probate figure |
| Scrap or metal value | The weight of the metal, for silver and gold | The floor, and below probate value for anything collectable |
Using insurance figures for probate overstates the estate and can create a tax bill that need not exist. Using a dealer’s offer understates it and stores up trouble.
Where the figure goes
The figures go on form IHT407. It lists jewellery, vehicles and antiques item by item, takes everything ordinary as a single total, and asks for the sale date and gross proceeds of anything already sold. Goods the deceased owned jointly with somebody else go on form IHT404 instead.
Where a professional valuation exists, enclose a copy with the form. HMRC accepts it without argument in nearly every case, which is the point of paying for one.
The IHT407 guide goes through the form box by box, with the £1,500 line, the wording HMRC’s notes use for open market value, and the three schedules that sit beside it. From there the total joins the five figures a probate application asks for, which the estate values guide sets out.
When the executor can do it alone
For a house of ordinary furniture, with no antiques, no jewellery of note and no collections, the executor can put a sensible figure on the contents without a professional. HMRC’s guidance accepts a reasonable estimate for ordinary household goods.
The right benchmark is the second-hand market rather than the price paid. A three-piece suite bought for £2,000 in 2015 makes £40 at a general saleroom in 2026, and £40 is the honest figure. Contents of an ordinary three-bedroom house, with nothing collectable in them, land somewhere between £500 and £3,000 in total.
Photograph every room before anything moves. The photographs cost nothing and they are the only evidence the executor will have if a figure is questioned two years later.
When a professional is needed
Get a written valuation if any of the following is true.
- The estate is anywhere near the inheritance tax threshold.
- There is jewellery, silver, pictures, antique furniture or a collection of any kind.
- Beneficiaries are likely to disagree about who gets what.
- Anything in the house is going to be sold rather than distributed.
A written probate valuation costs £250 to £600 for a typical house, and more where there is a large collection or where the valuer travels. Jewellery is the item most likely to come back on the wrong basis, and the jewellery guide gives the sentence to put in the instruction. Members of the Royal Institution of Chartered Surveyors and the recognised trade bodies produce reports HMRC accepts. Most auction houses waive or reduce the fee if the contents are later sold through them, so ask before agreeing a price.
The executor is personally responsible for the accuracy of the return. A few hundred pounds buys a document that transfers that risk to somebody with professional indemnity insurance.
The mistakes that cost money
Overvaluing. Using insurance figures, dealers’ retail prices or online listing prices instead of auction hammer prices. This inflates the tax. Asking prices on selling platforms are not sales, and anyone can list a plate at £900.
Undervaluing what later sells for more. An item valued at £500 that sells for £5,000 within a short period invites HMRC to revisit the return. Get anything likely to be significant valued properly.
Clearing before valuing. The clearance firm takes the contents, the estate has no record, and the two pieces of Georgian silver in the sideboard go with the rest. The house clearance guide covers this in room order.
Splitting collections. A stamp collection, a set of medals or a run of first editions is worth more together. Value it together, and if it is sold, sell it together.
Forgetting the metal. Silver, gold and coins have a floor set by weight, and that floor has moved a long way in two years. A canteen of sterling cutlery valued at £150 in 2022 is a different number now. The scrap calculator gives the current figure in a minute.
If something is sold before the form is filed
Estates sell contents while the paperwork is still moving. That is allowed, and the form has a column for it.
The sale price becomes strong evidence of the open market value at the date of death, provided the sale was at arm’s length and reasonably soon after. A saleroom result a few months after death is the best evidence an executor can have. A quick private sale to a family member at a friendly price is the worst, and HMRC will substitute its own figure.
Keep the saleroom’s account of sale. It states the hammer price and the deductions, and the gross figure is what goes on the form.
Capital gains after probate
The probate value becomes the base cost for capital gains tax if a beneficiary later sells an item for more than it. A low probate value therefore creates a gain later.
Take a picture entered on IHT407 at £800 and sold four years later for £6,000. The gain is £5,200 and it sits with the beneficiary. Had the picture been properly valued at £5,000 at the date of death, the gain would have been £1,000. The tax position across the two events is rarely identical, and the difference runs to four figures on a single item.
Chattels sold for £6,000 or less are exempt from capital gains tax under the chattels rules, which absorbs most household items but not a good picture or a jewellery box.
Selling the contents
Once probate is granted, the executor can sell. The auctions guide explains the charges and the timing, which run to four to six weeks after the sale before any money arrives. The price records give illustrative ranges for house contents and individual pieces.
What a saleroom does with a whole house, from the valuer’s visit to the account of sale, is set out in the estate auctions guide, along with the reason the figure on the schedule is the gross hammer price rather than the cheque.