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HMRC internal manual

Inheritance Tax Manual

Household goods and personal goods: valuation and technical issues: how we value household goods

IHTA84/S160 stipulates that the value to be included in the IHT400 (IHTM10021) is ‘the price which the property might reasonably be expected to fetch if sold in the open market at that time’. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

Where a valuation is described as being made ‘for probate purposes’ or for ‘IHT purposes’ you may want to confirm with the taxpayer or agent that the open market value has been used.

Generally, sales after the death, particularly those at auction, provide the best evidence of the open market value at the date of sale. The taxpayer or agent may be happy to substitute the sale prices for the original valuations or may argue for an adjustment due to market movement between the dates of death and of sale. You should consult SAV (Chattels) if appropriate.

You will occasionally find that the taxpayer or agent will deduct either the cost of obtaining the valuation or the costs incurred in sales from the gross value. You must remember that any costs incurred after the date of death are administration expenses and therefore not deductible. The auction sale price is the gross proceeds of sale (or hammer price) before deduction of commission and insurance and without addition of any buyer’s premium.

The taxpayer will sometimes seek to discount the value due to the fact that the assets are jointly owned. Please see (IHTM21043).