Contents Value Query

HappyScotsman

My mother passed away a few months ago. She was a widow and there will be a modest IHT bill to pay. I've been through her 3 bed house listing contents, but there's nothing of financial value. There are a couple of pieces that will go to auction but most of the rest are either electrical items without a PAT or furniture with no fire certificate. I'll dispose of these via freegle, gumtree and charity shops with anything left over to the tip. I recognise there's a difference between book value and realisable value since I live hundreds of miles away so don't have time to arrange private sale of items.

For IHT purposes, would HMRC accept "£350 the lot" or would they expect more and ask me to justify the figure?

Keep_pedalling

Most people’s household chattels are worth very little so I don’t see a problem with that sort of valuation. My wife’s uncles estate was valued at £1.4M of which the household contents were a nominal £500.

You say there will be IHT to pay, have you taking account of both transferable NRB and residential NRB from your father?

MovingForwards

It's based on second hand value. As you say there's very little so work out what has any value eg the auction ones and add a token amount on top for everything else. You may be over estimating with £350, but I've not seen it queried, regardless of estate value.

Flugelhorn

I think I put something like £500 which in retrospect was way over as usually costs more to dispose of items and that wasn't queried - as @Keep_pedalling says, double check the IHT as TBH unlikely that a widow in a modest 3 bed semi would be liable unless there was a lot in the bank

HappyScotsman

Flugelhorn said:

I think I put something like £500 which in retrospect was way over as usually costs more to dispose of items and that wasn't queried - as @Keep_pedalling says, double check the IHT as TBH unlikely that a widow in a modest 3 bed semi would be liable unless there was a lot in the bank

She had more than one house so even using all four allowances, there's still an IHT liability. Cost of disposal isn't an allowable expense in terms of IHT.  Part of me wants to go through the list again asking "would someone really pay ..." and mark a few more items down, but I'd be saving naff all IHT in the grand scheme of things, so to worth my time.

The buildings have been valued by RICS red book. Out of curiosity I had three estate agents round to value one house. They valued at £300k, surveyor at £280k. His IHT saving more than covered his fee.

sue1976

Our solicitor added the value of the contents to our probate forms as £250. 

naedanger

HappyScotsman said:

My mother passed away a few months ago. She was a widow and there will be a modest IHT bill to pay. I've been through her 3 bed house listing contents, but there's nothing of financial value. There are a couple of pieces that will go to auction but most of the rest are either electrical items without a PAT or furniture with no fire certificate. I'll dispose of these via freegle, gumtree and charity shops with anything left over to the tip. I recognise there's a difference between book value and realisable value since I live hundreds of miles away so don't have time to arrange private sale of items.

For IHT purposes, would HMRC accept "£350 the lot" or would they expect more and ask me to justify the figure?

As there is IHT to pay you will need to complete IHT407 for household and personal goods. The form gives an indication of the types of goods that HMRC are are interested in, e.g. jewellery, art, antiques, collections, vehicles, high value items listed separately on house insurance etc. If the estate has no assets in these categories then I think HMRC will understand a small figure covering all the goods together is appropriate. (I think the risk of going with a very low figure is HMRC might think you have been aggressive in other parts of the forms and give everything a bit more scrutiny. But I don't think it is a big risk.)

As regards the house, if it is to be sold remember to consider CGT.

I would also echo Keep_pedalling's point/question: "You say there will be IHT to pay, have you taking account of both transferable NRB and residential NRB from your father?"