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IHT405 is one of the most important supplementary schedules attached to the IHT400. Property is often the largest single asset in an estate, and getting the valuation right is critical — both to avoid overpaying inheritance tax and to avoid HMRC enquiries that can significantly delay the administration of the estate.
IHT405 is the schedule used to list all property, land, and buildings in which the deceased held an interest at the date of death. This includes:
Each property is listed separately on IHT405 with its address, tenure (freehold or leasehold), details of any joint ownership, any outstanding mortgage, and the open market value at the date of death.
The general rule is that all UK property owned by the deceased goes on IHT405. This includes:
Foreign property is generally reported on IHT417 (Foreign Assets) rather than IHT405. If you are unsure, include it on IHT417 and note the property details there.
If the deceased owned agricultural or business property for which you are claiming Agricultural Property Relief (APR) or Business Property Relief (BPR), you still list the property on IHT405 at its open market value and then claim the relief separately on IHT413 or IHT414.
The correct valuation basis for IHT405 is the open market value at the date of death — that is, the price the property would fetch if sold between a willing buyer and a willing seller on that date, with both parties having full knowledge of the market.
There are two main approaches to obtaining a valuation:
Do not use:
HMRC cross-references property valuations against Land Registry transaction data and local sale comparables. If your stated value is significantly below comparable sales, you are likely to receive an enquiry from the Valuation Office Agency (VOA).
How you report jointly owned property on IHT405 depends on the type of joint ownership:
Where the deceased owned a share of a property with a third party who is not a spouse, HMRC may accept a modest discount on the share value — because selling an undivided share is less straightforward than selling the whole property. This discount is typically 5–15% and must be justified.
Outstanding mortgages and secured loans are deducted from the gross property value on IHT405, giving a net value for the estate. To obtain the correct figure:
Equity release schemes are common in older estates. A lifetime mortgage or home reversion plan will show as a liability against the property. Request the outstanding balance or the value of the reversion at the date of death from the provider — do not overlook this, as the amounts can be substantial.
If the estate includes a farm, agricultural land, or a business interest, you must still include the property at open market value on IHT405. APR or BPR is then claimed separately:
Following the April 2026 reforms, the availability of 100% APR and BPR has been capped at £1 million combined (shared with BPR). Above that threshold, only 50% relief is available. See our guide on APR changes from April 2026 for full detail.
If HMRC opens an enquiry into a property valuation on IHT405, the case is referred to the Valuation Office Agency (VOA). The VOA will conduct their own assessment using comparable sales data and may physically inspect the property. Their revised figure takes precedence unless the executor formally challenges it — a process that can take months and may require specialist input from a RICS surveyor.
The best way to avoid an enquiry is to obtain a proper written valuation at the time of death, keep the evidence, and be prepared to justify the figure if asked.
IHT402 transfers unused nil rate band from a deceased spouse or civil partner. Claim up to £325,000 extra tax-free allowance. Step-by-step completion guide with worked examples.
IHT406 lists all bank accounts, savings, and ISAs in the estate. How to get date-of-death balances, handle joint accounts, and include accrued interest.
IHT407 covers furniture, jewellery, cars, art, and personal items in the estate. How to value household goods for HMRC, when professional valuations are needed.
IHT419 deducts debts from the taxable estate — mortgages, credit cards, loans, care fees. Which debts HMRC allows and common mistakes that trigger enquiries.
IHT435 claims the Residence Nil Rate Band (up to £175,000). Conditions, downsizing rules, taper for estates over £2m. Step-by-step guide.
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