Families overpay inheritance tax by misvaluing household items

New research from Swift Values says more than 80% of UK adults overestimate the probate value of everyday possessions, a mistake that can push grieving families into higher inheritance tax bills. The findings highlight a common confusion between insurance values and the lower open-market values HMRC uses for probate.

Why it matters: - British families can end up paying more inheritance tax than they should when household contents are listed at the wrong value for probate. - Inheritance tax is charged at 40% on estates above £325,000, so even small overestimates can turn into thousands of pounds in extra tax. - Overstating contents by £10,000 can mean an extra £4,000 goes to HMRC instead of staying in the family.

What happened: - Swift Values, a UK probate chattels valuation service, commissioned a survey of more than 1,000 UK adults. - The survey asked respondents to estimate probate values for common items, including a six-month-old John Lewis sofa, a diamond ring, an antique clock, an iPad and a washing machine. - More than 80% of people overestimated the value of everyday household items. - HMRC rarely corrects those overvaluations, which leaves the error in place on probate returns.

The details: - Only 1 in 10 respondents correctly valued a diamond ring bought for £6,250, which had a probate value of £1,250. - An antique clock bought for £2,500 was commonly valued at more than seven times its true probate value of £320. - A Bosch washing machine was often estimated at £200 to £400, even though its probate value was £40. - Previous executors made the same mistakes as people with no probate experience. - UK law requires probate to use the open-market value on the date of death, under Section 160 of the Inheritance Tax Act 1984. - Probate value is what an item would realistically sell for at public auction, not its purchase price or insurance value. - Many families confuse probate values with insurance values, which can inflate inheritance tax bills. - Swift Values says clients can upload photos online for a £30 remote assessment, book a £119 contents valuation, or arrange an in-person visit for higher-value estates. - Swift Values also offers £30 valuations for single items and £49 car valuations. - The company says every report is fully HMRC-compliant and has a 100% acceptance rate. - Swift Values says its service is trusted by Irwin Mitchell, Kuits, ZEDRA and The Probate Bureau. - Swift Values was shortlisted for Best Use of Technology at the British Wills & Probate Awards.

Between the lines: - The survey suggests the problem is not negligence, but a knowledge gap about what probate rules require. - Because people often assume higher insurance-style figures are safer, families may be unintentionally building tax liability into estate paperwork. - The issue is likely to matter most for executors handling estates with lots of everyday household items, where many small errors can add up quickly.

What's next: - Swift Values is pitching HMRC-compliant valuations as a low-cost way for executors and families to avoid overpaying tax and reduce the risk of future disputes. - The company is positioning its remote, fixed-price model as an easier route for families navigating probate after a death. - Mark Littler, founder of Swift Values, said professional probate valuations are meant to make sure families pay the right amount of tax, not more.

The bottom line: - Inheritance tax mistakes are often hiding in plain sight in the family home, and the biggest risk may be overvaluing ordinary possessions.