Household goods/chattel probate valuation

BlueJuly

Good afternoon everyone,

What exactly counts as household goods and chattels in probate? Does it include the kitchen white goods, curtains and carpets too? 
A late friend's estate is being valued for probate and I understand, via the next of kin, that there will be IHT to pay. 
I was surprised to learn that their solicitor  has suggested a little over two thousand as a figure for the household contents.

Surprised because my late friend was single, living in a one bedroom flat with nothing fancy or new in it and certainly no antiques or art works. 
I know from experience and the posts here that £500 seems a common figure for  houses, let alone a single flat. 

Any thoughts please?

p00hsticks

My understanding is that it's the entire contents of the flat and personal belongings such as phones, cameras, car etc.

I suspect for many people these days the most valauble items would probably be thier transport and electronics like the TV, iphone, computer etc.

When I was valuing my late brothers estate I didn't worry about carpets and curtains (which I assumed would be part of the house sale) and only had a finger in the air low valuation of the furniture, but did go to some pains to get a realistic valuation of his rather extensive vinyl record collection

kipsterno1

I placed a value of £1000 on the content of my late fathers home. The estate was well below IHT so it made little difference in my case. To give you an honest idea of the true value to date it has raised £75 and that was for bits of scrap metal in the garage. The rest went to charity then on freecycle and what didn't go sadly ended up in landfill.

Rodders53

HMRC refer to "Household and Personal Goods" not chattels

https://www.gov.uk/government/publications/inheritance-tax-household-and-personal-goods-iht407

If IHT is likely due then some more realistic / accurate valuations may be necessary to satisfy HMRC.  Personal goods like Gold coins and jewellery can soon add up.

Other items (furniture, movable white goods, etc.,.) can be pretty much worthless;  even if fairly new and in pristine condition.

Presumably Solicitor has been advised by "n-o-k" (executor?) of the items owned by the deceased and formed a sensible number that will be likely to be accepted by HMRC when they review the forms?

BlueJuly

No the next of kin apparently hasn't been consulted on it. The solicitor has "plucked a figure out of thin air" and is sticking to it. 

bobster2

BlueJuly said:

Good afternoon everyone,

What exactly counts as household goods and chattels in probate? Does it include the kitchen white goods, curtains and carpets too? 
A late friend's estate is being valued for probate and I understand, via the next of kin, that there will be IHT to pay. 

Did the friend own the flat? Fitted kitchen appliances, carpets and curtains etc are normally included in the transaction when you sell a house so could arguably be included in the property value rather than the contents value. But in any case, used carpets and curtains have essentially zero value on their own (unless there's something special about them).

But if there is IHT to pay then presumably this is a fairly large estate. A contents valuation of £2000 (rather than £500) could lead to £600 more in IHT - so not a huge issue when we're talking about an estate > £325,000.

Not sure why an Executor getting things valued would need to consult "next of kin" (not sure how that means in this context) or beneficiaries - unless they have particular expertise on the items.

Sea_Shell

BlueJuly said:

Good afternoon everyone,

What exactly counts as household goods and chattels in probate? Does it include the kitchen white goods, curtains and carpets too? 
A late friend's estate is being valued for probate and I understand, via the next of kin, that there will be IHT to pay. 
I was surprised to learn that their solicitor  has suggested a little over two thousand as a figure for the household contents.

Surprised because my late friend was single, living in a one bedroom flat with nothing fancy or new in it and certainly no antiques or art works. 
I know from experience and the posts here that £500 seems a common figure for  houses, let alone a single flat. 

Any thoughts please?

Are you sure IHT is payable?    Was their flat in an expensive part of the country?    Or did they have large savings/investments?

It seems unusual, on the face of it, that someone living such an outwardly modest lifestyle, would have to pay IHT, although they would only get the basic allowance of £325,000.

At the end of the day, the beneficiary(s) will still get 60% of the value of any assets that take the estate over IHT, after HMRC have had their 40%.    Is it just one beneficiary?, as to worry about having £800 deducted rather than £200, when you're about to receive £325,000 is a drop in the ocean really.

Do you have any direct involvement here (skin the game as it were), or are you asking more out of curiosity?

Keep_pedalling

It’s not difficult to hit £2000, I have a watch worth nearly that and camera gear 8x that on second hand values. 

Not that HMRC go round peoples houses and make an inventory of all the goods in it.

BlueJuly

Yes IHT is payable. Mainly because of the location + savings and since no RNRB  is available.
The next of kin is also the executor, so I would imagine that a solicitor should have asked about the contents first. 
I'm just curious, given our long friendship.
Yes it'll only add a few hundred, but hands up who wants to pay more tax than need be and especially when unjustified. 

Sea_Shell

If the solicitors have been appointed by the executor, rather than being directly named as executor, then the executor would be best placed to challenge the solicitors valuation and ask them to provide a breakdown as to how the figure was arrived at....for a (extra) fee!!

They work FOR the executor, yes?

The executor is on the hook if HMRC disagree with any valuations and so would need some "proof" of their lower valuation if it were queried.

theoretica

Does your friend want to keep any of the household contents?  Give it all to charity and the issue cancels itself out.  Sell the stuff and I believe you can replace the estimated value with the real sale price if it is worth doing.