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Household and personal goods are often the most subjective part of an IHT400 submission. The key principle is straightforward — use realistic second-hand values, not insurance replacement values — but knowing when to call in a professional valuer can save significant time and cost if HMRC later challenges your figures.
IHT407 is the supplementary schedule to the IHT400 that captures all tangible personal property owned by the deceased. It does not cover financial assets (bank accounts, shares, pensions) or real property (houses and land) — those have their own schedules. IHT407 covers the physical possessions.
The form asks for a breakdown of the main categories of goods with an estimated value for each, plus a total. You do not need to list every individual item — a summary by category is acceptable for ordinary household contents.
The following categories of personal property should all be included:
The correct basis for valuing household goods on IHT407 is the realistic sale value at the date of death. HMRC describes this as the amount a willing buyer would pay a willing seller in an arm's length transaction — in practice, what the item would fetch at a car boot sale, second-hand shop, or online marketplace like eBay.
This is not:
The car boot sale principle: HMRC accepts that for ordinary household furniture and effects, the realistic second-hand value is often very low. A used three-piece suite that cost £2,000 may be worth £50 at auction or a car boot sale. A kitchen's worth of appliances may fetch £200 in total. These low figures are acceptable — provided you are honest about any high-value items.
For most ordinary household contents, a reasonable estimate is acceptable and HMRC will not challenge it. However, professional valuations are strongly recommended — and practically essential — for:
Professional valuations typically cost £150–£500 depending on the scope, and are deductible as an estate administration expense. They are a worthwhile investment — an incorrect valuation can result in penalties and back-tax being assessed.
Motor vehicles must be declared at their market value at the date of death. The most straightforward approach is to use a published guide price from one of the main valuation services:
Enter the vehicle's registration number, and use the private sale value for a vehicle in the condition it was in at the date of death (not the trade-in value, which will be lower). Note the mileage and any relevant condition factors.
For vehicles that had significant mechanical issues or cosmetic damage at the time of death, you can adjust the valuation downwards — but keep a note of the reasons in case HMRC asks.
Classic cars, motorcycles, and rare vehicles should be valued by a specialist. The value of certain classic cars can be highly variable and market-dependent.
For most household goods, particularly those in a shared home, HMRC does not typically allow a discount for joint ownership in the way that applies to jointly owned property or shares. The general approach is:
In practice, for a typical household where both spouses lived together, it is common to include 50% of the total household goods value. HMRC accepts this approach.
HMRC very rarely opens an enquiry purely on the basis of a low household goods valuation for ordinary contents. Where the total declared value of household goods is modest (say, under £5,000 for a typical home), HMRC will generally accept the figure without question.
Enquiries are much more likely where:
If HMRC opens an enquiry, they may request sight of the professional valuation or ask for evidence of how the figures were arrived at. Keep all valuations and records securely for at least seven years after submitting the IHT400.
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.
IHT405 lists all property, land, and buildings in the estate for inheritance tax. Get the valuation right to avoid HMRC enquiries. Step-by-step completion guide.
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.
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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