Chapter: 2 - Inheritance Tax Mitigation: The Basics

Overview

2.6.1

It often comes as something of a shock to people to discover quite how much the contents of their house (or houses) and other personal possessions are worth.  But all that value is potentially subject to IHT on death; subject of course to the spouse/civil partner (and possibly the charities) exemptions.  There remains still a widespread but mistaken belief that in valuing chattels on death there is a permissible discount from market value of something up to one-third.  That is not the case, as HMRC Inheritance Tax have been reminding us at various points over the last two to three years.  The statutory valuation rule  is ‘the price which the property might reasonably to fetch if sold in the open market’ at the date of death (IHTA 1984 s160).

So, what’s to be done?  The answer could be (as developed at 8.3):