Inheritance tax - how to value a hoarders contents.

[Oncetwicethreetimesalady]

So my dad was on his own since mum died a decade ago, now he has died I have to sort out the house. They always had a lot of stuff but without mum around he’d been buying even more. They lived in an old farmhouse with outbuildings. The property is worth around a million. I honestly didn’t realise he had so much squirrelled away. It’s loads of random antiques and general old stuff Some might be worth a bit of money, maybe occasionally up to £500, some probably not worth anything at all. A lot are charity shop purchases. I’ve checked his ebay and he was paying say £50 for a table that I might have otherwise have thought was worth a lot more. Most things he had for years or there is no record of what was paid. But, I suppose even things of little value can add up if there is enough of them and there is a lot.
My question is, how do I put an accurate value on this all for inheritance tax purposes. It seems to me that it would take months to research what each item was worth because there are hundreds and hundreds of individual things. A professional valuer couldn’t even get to all the things to value them without a lot of trouble rummaging everything out and like I say, it would take forever. I don’t know where to begin. It seems insurmountable at this stage and I just want it to be sorted as simply as possible.

Difficult. What do you plan to do with all the stuff? If you're going to get an auctioneer/house clearance person in to take it all away could you get one in now who will do an estimate for you? Or do you plan to sift through it all and sell it bit by bit?

Sell it now I reckon, add it to the estate and begin plannning. Or he could gift it you and then the clock starts ticking for 7 years tapered relief?

I really want to sift through it as there is stuff of sentimental value in there for sure. Then I would sell it bit by bit. I’d struggle to just dump it all because some of it meant a lot to him and mum and although it’s a real mix there will be things of moderate value like I say, a few hundred quid or so.

Realistically if it’s truly jam packed in it has negative value. You can hire a professional service to come in and sort an estate. They will sell off anything valuable, donate to charity what is usable, and bin the rest. If conditions are poor it will take them more time and they will have to charge more for their services. You can still retrieve anything sentimental.

You can do this task yourself, but your time is worth something as well. Meanwhile it will take a long time and the house will be sitting there with various bills being paid out of the estate, also costing more money.

You will need to do a clear out, put aside the items you think may have some value and then get a professional valuer to provide a “price”. Whoever is the beneficiary/ies will then be able to decide whether to sell or keep any or all of the items.

If its going to be that much work then the real value of the collection will be negative. The small amounts of money that can be recouped on the items with value will not be as great as the costs of dealing with all the things of low or zero value

Realistically if it’s truly jam packed in it has negative value

Exactly this. Most secondhand furniture is worth peanuts. You will probably have to pay a house-cleaner several thousand to clear the house. Check with your accountant, but this may count as a cost borne by the estate (as opposed to you as a beneficiary), which would mean that it reduces your IHT liability.

Sorry for your loss.

My df did this with his parents house, an auction house to value furniture etc, this they then took to auction. Personal sift through the things he wanted to keep or thought other family members would like and then the rest to the tip. He did look at house clearance but it was expensive and he decided that he could do the trips to the tip. He is not sentimental though so found it easy to sort through in this way.

Contact your local auction house and ask for a chattels valuation for probate purposes. Whatever you think the state of it is, they will have seen worse. It's sometimes surprising how easy it is to value a barn full when you an only see bits of everything (I speak from experience!)
They can then give you a valuation to submit for IHT
They then will be able to help you sell saleable items,, work out what to donate to charity shops and what has to be sent to the tip.
It's never as daunting as you think it is but the emotional attachment makes it difficult to start. Good luck.

Personally I wouldn’t add any of these goods in with the inheritance tax form. There is going to be a lot of inheritance tax to pay anyway from the sale of the house. It’s difficult enough clearing out someone’s belongings without having to put a value on it. When we sold my father in laws house, we had a friend round who did house clearances thinking there were some things of value, but they said most of it was only fit for charity shops.

Thank you. I guess if I had to pay someone to clear it, it would cost me. If I choose to spend months sitting through I’d probably only get the equivalent of wages out of it as it would be so time-consuming.

Would a price from a house clearance co be acceptable to probate? Considering that the property value alone already puts the estate just into the inheritance tax level (barring a change on weds) would probate need a chartered surveyor to value the contents. I’m not planning on selling the house, I’m going to rent it out for now.

I don't think any changes announced in the Autumn Statement would apply to your father as he has already passed away.

Condolences on your loss.

The standard valuation for house contents for probate is £500.
These days even charity shops won’t take any ‘dark wood’ furniture because they can’t even give it away.

If you are the only beneficiary then just put down an arbitrary figure for furniture, personal items, valuables etc. eg £500 for furniture, £100 personal and £300 valuables. No one is going to come round and check.

I just had to sign off the inheritance tax on an estate, the value of the possessions weren’t taken into account from memory.

I’ve taken the 2 things I wanted out of the house (no value whatsoever, just sentimental, a photo of my relative and a Christmas bauble), everyone else in the family will be invited to come and take what they want on a specific date.

After that, there are 2 local charities that were really involved in their life in the later years and I’ve asked if they want to come and take anything. There are new sofas, new furniture, antique furniture etc but family don’t want any of it as they all have their own.

Whatever’s left will be down to a house clearance company. Second hand furniture apparently doesn’t have much value, even really good well made old stuff. Either way, I don’t have the patience to deal with it even if it did.
Fortunately it’s not a cluttered hoardy house so it won’t take long.

Honestly, I’d take anything of sentimental value that you know you can house and anything else I’d just get someone in. I know you said you don’t want to but realistically how long do you want to spend going through things one by one and what are you going to do with it all? The money has been spent on these things, your parents had their enjoyment out of them, don’t let it all pile up on top of you out of a sense of guilt.

sorry for your loss, it’s a really hard and in many cases cruel thing to be left to deal with 💐

I think it is only if there is stuff like expensive works of art, jewellery etc it's itemised, not stuff bought off eBay in the hope it's worth something. The Salvation Army took a lot of DMs furniture. There will be a general amount for chattels which the solicitor if you are using one will advise what to put.

It's the value at the time your dad died.

My dad died in August and the executor arranged to have McTears, the auctioneers, come to the house to value the contents, even though his estate is nowhere near the inheritance tax threshold (when combined with Mum's £500k IHT - she died 11 years ago).

IMHO their values were extremely conservative (especially when compared to things they themselves have auctioned recently by the same painter ), and he didn't even comment on one painting that ds had always thought was the most valuable but it's been done professionally, so that's the executor done their job as far as the Inland Revenue is concerned - and we're nowhere near the £1M threshold (plus the beneficiaries aren't uptight: we'll divide the cash and the value of the house as per his will, but the paintings and contents we'll divide according to who likes what and take it in turns to choose).

The executor also had someone come round to formally value the house.

The executor is the lawyer who drew up the will (there was also another executor but she died in February and dad, who was very organised and reviewed his will every 2 years, died very unexpectedly : he'd have re-done it this month).

Thank you.
It is a lot of dark wood furniture, so maybe worth a lot less than I might think. I literally have no idea!
it is hard being left with this and I’m an only child so no siblings to share the burden or memories with. It feels bad to me if all their things are worth nothing but I guess it’s simpler that way.
All mum’s jewellery was stolen in a break in years ago, they didn’t touch any of the random stuff or furniture so I guess that tells you something!
There is no rush for me to deal with it fortunately. The house I can clear into an outbuilding and rent it out to cover all the expenses of the property. In the long run I will clear and convert the other outbuildings into something useful. If the house valuation is around a million which seems pretty certain then they’ll only be a small amount of tax to pay which I can cover without too much trouble.

@Oncetwicethreetimesalady I do feel for you here . I would not take lots of time off to clear the place. Take what you find sentimental.

It will cost you money for house clearance - we paid £7,500 for DPILs 4 bed house with attic but Oh how much "stuff" . Unless you are happy to hire vans etc then you will have to pay. I agree with a PP - some furniture etc you can't give away so just get rid of it unless you want it.

It's a horrid job but once sentimental items taken & anything else you want / worth something taken out - the rest can go to a house clearance company. My MIL had a set of plates she thought were worth something - I could not give them away. Sad because she liked them but no-one else did .

I would not spend months doing this , I would say you and any siblings take what you want and then the rest you will have to pay to be removed. We did not charge house clearance against probate ( house worth a fraction of your dad's ) .

I went with the house clearance people as once DH & siblings had taken anything it was easier for me to see things which they had cherished but essentially worth nothing ( in £ ) pretty much thrown away

It's a hard time to see someone's life loaded into the back of a van.

When you say a small amount of tax won't it be 40% of 300k?

No, the estate will be taxed above 500k (if a property is being left to the child of the deceased) and increases to £1 mil if the mother was married to the father as her allowance (also 500k) is also added.

Eh? He’s already died!

Ok, I thought it was 325k each for a married couple.

Would it not look a bit suspicious? The house is worth £1million. You’d expect to find higher value items in it.

@whatsappdoc that is the normal nil rate band. There is also residence nil rate band of 175000 if home is left to direct descendent. Introduced in 2017 and you can take over your spouses if they didn’t use it including if they died before its introduction. So 325 plus 175=500 then x 2