IHT407 Explained: Household and Personal Goods for Inheritance Tax
In brief
IHT407 is the schedule to form IHT400 on which the deceased's belongings are reported. Jewellery worth £1,500 or more per item, every vehicle, and every antique, work of art or collection are listed individually at Open Market Value. Everything else in the house is entered as one total. The values are what the items would fetch if sold, not what they cost or what they are insured for.
When You Need to Complete IHT407
IHT407 is only required where form IHT400 is being submitted. Excepted estates report a single contents figure through the probate application and do not complete the schedule. If the estate is taxable, over the excepted-estate limits, or claiming the residence nil-rate band, IHT400 applies and household and personal goods go on IHT407.
The schedule covers everything the deceased owned that is tangible and movable: jewellery, watches, cars, furniture, pictures, silver, ornaments, books, clothing, tools, garden equipment, collections of any kind, and the contents of any safe-deposit box. Cash, bank accounts, shares and property are reported elsewhere. Business stock and assets used in a trade are reported on the business schedule.
The Four Categories and How Each Is Reported
The form separates goods into categories with different reporting rules. The categories exist because HMRC wants to see the items that carry value individually, and is content to see the rest as a total.
| Section | What it covers | How to report | Valuation basis |
|---|---|---|---|
| 1. Jewellery | Rings, necklaces, bracelets, watches, loose stones, gold | Each item worth £1,500 or more listed with a description and value. Items under £1,500 added together as one figure. | Open Market Value at date of death |
| 2. Vehicles, boats and aircraft | Cars, motorcycles, motorhomes, caravans, boats | Each vehicle listed with make, model, year, registration and value | Private-sale value at date of death |
| 3. Antiques, works of art and collections | Paintings, prints, sculpture, silver, clocks, furniture of note, stamps, coins, medals, wine, books | Each item or each collection listed with a description and value | Open Market Value at date of death |
| 4. Other household and personal goods | Everything else: ordinary furniture, appliances, clothing, kitchenware, tools | One total figure | What the lot would fetch if sold |
What the £1,500 Figure Means on IHT407
The £1,500 figure appears in the jewellery section and nowhere else on the form. It is the point at which an individual piece of jewellery must be listed on its own line rather than absorbed into a total. It is not a threshold above which a professional valuation becomes compulsory, and it does not apply to vehicles, antiques or art, which are listed individually whatever they are worth.
HMRC's general guidance separately says that you can get a professional valuation for anything worth over £1,500. That is permission and advice, not a rule. In practice a written valuation is the sensible way to support any listed item, because a figure on IHT407 with nothing behind it is the one HMRC is most likely to query.
Valuation Basis: What the Items Would Sell For
Every figure on IHT407 is Open Market Value at the date of death: the price a willing buyer would pay a willing seller in the open market. For jewellery, art and antiques that means the hammer price at a suitable auction. For a car it means the private-sale price. For ordinary household goods it means second-hand value, which for most of a house is very little.
Insurance valuations are the wrong basis. They state the cost of replacing the item new at retail, which for jewellery can be three or four times its auction value. Copying an insurance schedule onto IHT407 overstates the estate and, where tax is due, overpays it. Purchase prices are also wrong; a ring bought for £5,000 in 1985 is worth what it would fetch today, no more and no less.
Condition counts. A cracked stone, a chipped vase or a car with a failed MOT is worth less than a perfect example, and the description on the form should say so.
A Worked Example
A widow dies leaving a three-bedroom house, its contents and a car. Her executor walks the house with the inventory builder and a valuer visits for the jewellery and two paintings. The IHT407 comes out as follows.
| Section | Entry | Value |
|---|---|---|
| Jewellery, listed | Platinum solitaire diamond ring, approx. 1.1 ct | £2,800 |
| Jewellery, listed | 18 ct gold Omega ladies' wristwatch, 1968 | £1,600 |
| Jewellery, total of items under £1,500 | Nine pieces: gold chains, earrings, brooch, costume jewellery | £1,150 |
| Vehicles | 2016 Honda Jazz 1.3, 41,000 miles, reg. XX16 XXX | £6,200 |
| Antiques, art and collections | Oil on canvas, harbour scene, signed, 1930s | £900 |
| Antiques, art and collections | Georgian mahogany bureau | £450 |
| Antiques, art and collections | Canteen of silver-plated cutlery, and silver tea set (hallmarked Sheffield 1912) | £700 |
| Other household and personal goods | Remaining contents of house and garage | £2,400 |
| Total | £16,200 |
Items to Be Sold, and What Happens to the Figures
The schedule asks whether any of the goods are to be sold. Where items are sold at auction during the administration, the sale price is good evidence of value and HMRC will often accept it in place of the estimate. Unlike land and quoted shares, there is no statutory loss on sale relief for chattels, so a sale for less than the declared value does not automatically reduce the tax; it does, however, support a correction if the original figure was an estimate.
The practical advice is the reverse of the usual instinct. Do not sell or clear anything before it has been valued or at least inventoried, because once the goods have gone the evidence for the figures has gone too.
Selling estate contents at auction: fees, reserves and timing
Common Mistakes on IHT407
Executors tend to make the same handful of errors.
- Entering insurance replacement values for jewellery.
- Listing only the pieces the family thinks are valuable, and missing the one that is.
- Entering a token £500 for a house full of antiques and silver.
- Leaving out the car, or listing it at the trade-in price rather than private sale.
- Grouping a collection as household goods when it belongs in section 3 with its own value.
- Forgetting the contents of a safe-deposit box, a second home or a storage unit.
Ready to arrange one? Learn more about our house contents valuations with an IHT407 schedule.
Frequently Asked Questions
01Do I need a professional valuation for IHT407?
Not by rule. The schedule asks for reasonable Open Market Values and HMRC can query any of them. A professional valuation is the usual evidence for listed items such as jewellery, art and antiques, and is worth obtaining wherever an item may exceed £1,500 or the estate is taxable. Ordinary household goods can be estimated by the executor.
02What value do I put for general household contents on IHT407?
A realistic total of what the ordinary contents would fetch if sold second-hand, which for most houses is a modest figure in the low thousands. It should be a considered estimate from a room-by-room inventory, not a guess.
03Do I have to list every piece of jewellery?
Only pieces worth £1,500 or more are listed individually. Everything below that is added together and entered as one total in the jewellery section. A short description of what the total includes helps if HMRC asks.
04Are personal belongings with no resale value included?
Yes, but at their sale value, which may be nil or close to it. Clothing, worn furniture and everyday items are included in the household goods total at what they would actually fetch. Sentimental value is not a factor.