A hub guide covering every asset type, the IHT400 rules, the date-of-death valuation rule, deductible liabilities, jointly owned assets, IHT thresholds, HMRC challenges, and what to do if you get it wrong.
This guide is part of ProbateHelp's Inheritance Tax guide cluster. Estimated reading time: 18 min.
You must use the open market value of each asset on the date of death — not the date you obtain the valuation, not the date probate is granted, and not the date assets are sold. If a property sells for more than its date-of-death valuation, HMRC may investigate whether the original valuation was accurate.
No. For everyday household contents of modest value, a reasonable estimate is acceptable. You need a professional valuation for property, vehicles above a modest value, jewellery, antiques, art, and any item where the value is uncertain or significant. For shares and ISAs, the values are obtained from the registrar or provider — no surveyor is needed.
HMRC can ask the Valuation Office Agency or District Valuer Services to review property and land valuations. If the agreed value is higher than the figure submitted, HMRC may seek additional IHT and interest. You can provide evidence and negotiate; if a valuation issue cannot be agreed, HMRC guidance says it may be referred to the Upper Tribunal (Lands Chamber). A well-supported chartered surveyor's report gives you a stronger position.
The gross estate is the total value of all assets before any deductions. The net estate (also called the 'taxable estate') is the gross estate minus liabilities — outstanding mortgages, debts, funeral expenses, and certain other costs. Inheritance tax is calculated on the net estate, not the gross estate.
It depends on how they are owned. Assets held as joint tenants pass automatically to the surviving owner by the right of survivorship and do not form part of the probate estate — but they do count for IHT purposes. Assets held as tenants in common pass under the will or intestacy rules and form part of the probate estate. The deceased's share of a jointly owned property must be valued and reported to HMRC regardless of whether probate is required for it.
Yes. Reasonable funeral expenses are deductible for IHT purposes. HMRC's IHT400 puts funeral costs, headstone and other funeral costs in box 81. HMRC normally accepts reasonable claims but may ask for a breakdown if the costs look wholly unreasonable, large compared with the estate, or inconsistent with the file.
You are required to make reasonable enquiries to identify all assets. This means checking bank statements, tax returns, dividend vouchers, insurance documents, and the deceased's email and post. The government's Tell Us Once service notifies many public bodies automatically. For financial assets, use current tracing routes such as My Lost Account for dormant accounts and NS&I products, the Pension Tracing Service for old pensions, and direct provider enquiries where you have paperwork or payment clues. If you later discover an asset you missed, you must submit a corrective account to HMRC.