Why this note exists
Jewellery is often valued with little to go on. The family may not know what any of it is, the only record may be an old insurance schedule, and the person holding the box wants a number today.
It is also an asset where a defensive round number can cost the estate, for the reason set out under loss relief below.
What form IHT407 actually asks, and the trap in box 1
Form IHT407, Household and personal goods, is the supplementary schedule to IHT400. It is required whenever a full IHT400 account is delivered and the deceased owned household goods or personal possessions. Jointly owned goods go on IHT404 instead.
Box 1 covers jewellery, and its rubric reads: “Enter details of any individual items of jewellery valued at £1,500 or more in the box below. If you have a professional valuation, enclose a copy.” Box 4 takes everything else as a single total, including “items of jewellery valued at less than £1,500, furniture and other domestic items.”
Three points in the wording
- The two £1,500 tests are worded differently and are not the same test. The listing threshold on the form is “£1,500 or more”. The professional valuation advice in the IHT400 Notes is triggered at “more than £1,500”. An item at exactly £1,500 must be listed but does not, on the literal wording, attract the valuation advice.
- The de minimis is unique to jewellery. Boxes 2 and 3, covering vehicles, boats, aircraft, antiques, works of art, collections, stamps, coins and medals, carry no monetary threshold at all. Every such item is listed individually whatever it is worth. A modest coin collection is listed; a 1,400 pound ring is not.
- Box 5 is a cross-check. It asks whether the box 4 items were individually listed on the household insurance policy, and if so asks for a copy of the policy and schedule.
Box 1 also carries a column headed “If the item has been sold, give the date of sale and gross sale proceeds”, sitting alongside, not instead of, “Open market value at date of death”. They are different figures and the form expects both.
Sources: IHT407 form and guidance and IHTM21011. The current form is the July 2018 edition and has not been revised since, so check the box numbering before relying on it.
The statutory test
Everything turns on one sentence. Section 160 of the Inheritance Tax Act 1984: “the value at any time of any property shall for the purposes of this Act be the price which the property might reasonably be expected to fetch if sold in the open market at that time; but that price shall not be assumed to be reduced on the ground that the whole property is to be placed on the market at one and the same time.”
The statutory heading is Market value. “Open market value” is HMRC manual shorthand, not the language of the Act.
Costs of sale are not deducted. Costs incurred after death are administration expenses. Sources: IHTA 1984 s.160 and IHTM09703.
HMRC judges the basis, not the valuer
The key passage is in IHTM21041: “if the taxpayer has provided a professional valuation of household goods, which states that it has been prepared on the basis of the open market value and/or in the terms of S160, you will usually be able to accept it.”
And the corollary: “A valuation prepared on any other basis may not satisfy the terms of S160... For example, a valuation ‘for insurance purposes’ using replacement values may include too high a value.” And on labels: “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.”
Neither section 160 nor IHTM21041 names a qualification the valuer must hold. What the manual looks at is the basis the valuation states: a valuation for insurance replacement may include too high a value, whoever signs it.
So put the basis in the instruction. The IHT400 Notes say it in one line: “Remember to tell the valuer that you want the open market value of the items at the date of death.”
Registered valuers can be found through the NAJ Institute of Registered Valuers directory, which lists jewellery, watch and silverware valuers, and RICS Find a Surveyor, which lists RICS-regulated firms for antiques and art. Whoever you instruct, state the basis in writing.
Source: IHTM21041.
When a professional valuation is expected, and when it is not
In the IHT400 Notes, HMRC’s position is advisory rather than mandatory: “You do not have to get a professional valuation for ordinary household and personal goods where you can use publicly available data to estimate the value... If you think any item may be worth more than £1,500, or you’re not sure, we advise you to get a professional valuation.”
For excepted estates, IHTM06033 goes further: “We do not insist on a professional valuation of assets although personal representatives ought to consider getting one where preliminary estimates put the gross value of the estate close to the excepted estates limit... However, if the gross value of the estate is likely to be less than £200,000, the guidance specifically states that personal representatives may use their own realistic estimate as the value for any of the assets.”
Note the standard even for estimates: “Do not guess at a value, but try to work out an estimate based on the information you have.” A realistic estimate is acceptable. A nominal figure is not.
The point that inverts the usual advice: chattels have no loss relief
Quoted shares sold within twelve months for less than their value at death can attract relief under sections 178 to 189. Land sold within four years for less can attract relief under sections 190 to 198.
So if jewellery correctly valued at £40,000 at the date of death later sells for £22,000 because the market has fallen, the inheritance tax stays based on £40,000. There is no loss relief to claim, unless the section 176 relief below applies.
That is the practical argument for a properly based valuation at the outset rather than a defensive round number. Sources: IHTA 1984 Part VI, s.178 and s.190.
A relief that can apply to jewellery: related property sales
Section 176, related property sales. Where property was valued in conjunction with other property, whether related property under section 161 or property in the estate passing under another title, and is sold within three years of death at arm’s length for less than the aggregated value, a claim restores the standalone valuation.
Where this bites for jewellery is a suite, a pair of pieces or a collection split between the deceased and a surviving spouse, or between the free estate and a settlement. Valued together the combined figure can be higher, and HMRC relies on case law for valuing property together where that gives a better price (IHTM09712). Sold separately within three years for less, section 176 undoes the aggregation.
The qualifying conditions are strict: the vendors must be those in whom the property vested or the personal representatives, the sale must be at arm’s length for a freely negotiated price, it must not be made in conjunction with a sale of the related property, and there must be no connection between vendor and purchaser and no right to reacquire. Sources: IHTA 1984 s.176 and IHTM09751.
Sales after death: strong evidence, but read the sentence carefully
IHTM21041: “Generally, sales after the death, particularly those at auction, provide the best evidence of the open market value at the date of sale.”
HMRC says a post-death sale is the best evidence of value at the date of sale. The statutory measure remains value immediately before death. A near-contemporaneous arm’s-length sale is powerful evidence of the date of death figure. A sale after a market move is not, and either side may argue for an adjustment, which with gold is a live issue in any period where the metal price has moved materially between death and sale.
- The figure is the hammer price: “the gross proceeds of sale... before deduction of commission and insurance and without addition of any buyer’s premium.”
- Sale costs are not deductible: “any costs incurred after the date of death are administration expenses and therefore not deductible.”
When you genuinely cannot establish a value
Two provisions protect a personal representative who cannot reach a firm figure, and both depend on saying so rather than picking a number.
Section 216(3A) IHTA 1984 allows a provisional estimate where the personal representatives, “after making the fullest enquiries that are reasonably practicable in the circumstances, are unable to ascertain the exact value of any particular property”, provided the account contains a statement to that effect, the estimate, and an undertaking to deliver a further account once the value is known. Provisional estimates are listed on page 13 of IHT400.
What is actually at stake
Liability. Personal representatives are liable for the tax under section 200(1)(a). Liability is capped by section 204(1) at the assets received, but the cap extends to assets the personal representative “might have so received but for his own neglect or default”. So a personal representative who hands jewellery over before its value is settled can remain liable up to what they received, or would have received but for their own neglect or default.
Penalties. An inaccurate IHT account falls within Schedule 24 Finance Act 2007, whose table at paragraph 1 lists “Account under section 216 or 217 of IHTA 1984”. An inaccuracy that involves a domestic matter is in category 1 (paragraph 4A), with these rates:
| Behaviour | Penalty | Minimum, unprompted disclosure | Minimum, prompted |
|---|---|---|---|
| Careless | 30% of potential lost revenue | 0% | 15% |
| Deliberate, not concealed | 70% | 20% | 35% |
| Deliberate and concealed | 100% | 30% | 50% |
An unprompted disclosure of a careless inaccuracy can be reduced to nil, which is a strong argument for correcting a chattels figure the moment a sale shows it was wrong. Careless means a failure to take reasonable care, and HMRC says reasonable care has to be “viewed in the light of that person’s abilities and circumstances” (CH81120).
Sources: IHTA 1984 s.204, Sch 24 FA 2007 para 4, para 4A, CH82470 and IHTM36101.
How HMRC actually checks
We found no published referral threshold. The household goods pages speak of “very valuable items”, of asking for advice “if the amounts involved are worthwhile”, and of concentrating “on the higher value items or estates”.
What HMRC cross-checks
- Whether the goods figure is “consistent with the value and nature of the deceased’s main residence, the estate as a whole”. A large house against a small goods figure invites the question, and HMRC says so explicitly.
- The deceased’s stated occupation on IHT400. An art or antiques dealer is expected to have a substantial IHT407.
- The will. “The deceased’s Will may refer to specific assets and you will need to consider whether these have been reflected in the IHT400.” A specific legacy of a named ring that appears nowhere on IHT407 is a visible gap.
- Ancillary evidence, such as garage bills implying an unreturned car, and the box 5 insurance answer against a lumped box 4.
Excepted estates: the standard does not relax
For deaths on or after 1 January 2022, an excepted estate that needs probate reports its estimated value in the probate application (online, or on form PA1P or PA1A by post in England and Wales) rather than on form IHT205, and one that does not need probate is not reported at all (GOV.UK). IHT205 is still used for deaths on or before 31 December 2021 (GOV.UK). Scotland and Northern Ireland have their own application procedures.
The change came with The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 (SI 2021/1167).
IHTM06033 is explicit that the valuation standard is unchanged: “the regulations import the provisions of IHTA84/S160 by defining ‘value’ as meaning ‘value for tax’. This means the open market value of an asset must be used... We expect personal representatives to meet the same criteria for excepted estates.” It matters most where jewellery could take an estate over the Inheritance Tax threshold, or where pieces were given away in the 7 years before death, which GOV.UK counts towards the estate.
One exemption worth knowing
A relevant decoration or award is excluded property under IHTA 1984 s.6(1B) if it has never been disposed of for money or money’s worth. Section 6(1BA) defines the awards, including those for valour or gallant conduct and those awarded in connection with service in the armed forces, and the IHT400 Notes name the Victoria Cross. Worth a specific question when medals appear in an estate, and when they were bought rather than awarded.
A practical sequence
- Photograph everything before it is divided. Pieces can be shared out within days, and then the record is gone.
- Separate what must be listed from what must not. Individual jewellery at £1,500 or more goes in box 1. Vehicles and boats go in box 2, and antiques, works of art and collections, coins, medals and stamps included, in box 3, whatever they are worth. Everything else is a single figure in box 4.
- Instruct on the right basis, in writing. Open market value at the date of death, in the terms of section 160 IHTA 1984. Not “for probate purposes”.
- Check any existing valuation for the basis it states, not the heading it carries. An insurance replacement figure is the wrong number and is usually too high.
- Where a value cannot be established, say so. A section 216(3A) provisional estimate with an undertaking, listed on page 13 of IHT400, and the uncertainty flagged.
- If a sale follows, record the hammer price gross, and note the interval and any market movement between death and sale.
- Correct promptly if a sale shows the return was wrong. An unprompted disclosure of a careless inaccuracy can carry a nil penalty, and there is no chattels loss relief, so correct it with a further account.
About this note, and its limits
GoldPaid buys gold, silver, coins and watches by post, UK-wide. Two things we want to be plain about, because they bear on how you use this.
Two questions HMRC guidance does not answer. When we wrote this note we found no HMRC guidance on scrap or melt value against retail or auction value for gold jewellery, and none on whether a dealer’s offer is evidence of open market value, in either the Inheritance Tax Manual or the Shares and Assets Valuation Manual. What section 160 requires is the price the property might reasonably be expected to fetch on the open market; whether that is bullion value or something higher, for a piece with design, maker or period interest, is a question of fact for the valuer.
This note is general guidance on published law and HMRC practice. It is not legal or tax advice and does not create a professional relationship. The sources were checked on 11 September 2026, when form IHT407 was still the July 2018 edition. Check the current position before relying on any of it. Practitioners are welcome to reproduce, adapt or circulate this note; no permission is needed and no attribution is required.
Related reading: what we offer probate solicitors, the Hallmarking Act dealer notice and exemption weights, and how purity is established by XRF.