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Find out more‘I overpaid inheritance tax by thousands of pounds’
Discovering that she’d overpaid a tax bill by £6,600 was bad enough for Justine Fernandes. Knowing that it was her own fault only made it more galling.
Justine had been grieving for her late mother while trying to piece together her affairs and complete an inheritance tax return for HMRC.
She and her brother went through the contents of the house in Chester, including jewellery and an eclectic collection of trinkets from around the world, and came up with a figure of £20,000.
With inheritance tax being charged at a rate of 40%, that would make for a bill of £8,000, which they paid HMRC.
Later, when the family tried to sell some of the jewellery, they began to have doubts about their valuation and decided to seek a professional opinion.
That produced a figure of £1,500 for the jewellery and £2,000 for the rest of the home contents, meaning they should only have paid £1,400 in inheritance tax.
Justine's story is far from unique. Here we reveal how inaccurate valuations can lead to huge inheritance tax bills, and how to reduce the chances of getting them wrong.
One job among many
When someone dies, their executor needs to go through the probate process before their assets can be inherited, assuming they had a will.
As well as valuing the estate, the probate process involves notifying providers and dealing with family and friends of the deceased.
The work can add up, making it tempting to rush certain tasks.
‘Our solicitor had suggested we get a professional valuation but in the end we estimated the value of the house contents ourselves,’ said Justine, a chartered architect from Edinburgh.
‘It was partly that we were just overwhelmed at the time, and we felt that valuing the contents for probate wouldn’t be that difficult.
‘Mum had some lovely jewellery, and had collected a lot of antiques and objects on her travels over the years. We’ve since sold some of these via online auctions and realised that what you get when selling is only a fraction of what they would have cost originally.’
- Find out more: What is probate?
An expensive guessing game
Valuing an estate can be daunting as you need to put a price on assets that may have been acquired decades ago.
As any inheritance tax must be paid by the end of the sixth month after the death to avoid paying interest, it’s possible the tax bill is settled before assets are sold – and before the gap between expectations and reality becomes apparent.
New research shows that it’s common for families to overestimate the value of possessions, sometimes significantly so.
Probate valuation company Swift Values carried out a survey of more than 1,000 UK adults, asking them to estimate the probate value of a range of household items.
The most overvalued item was an antique clock bought for £2,500. The most common survey answers put it at between £1,000 and £2,000, while the correct probate value was only £320.
Far too many families are unknowingly giving money away to the taxman
Mark Littler, Swift Values
A Bosch washing machine was routinely estimated at £200-£400, despite a probate value of £40. A diamond ring, bought for £6,250 and in excellent condition, now had a probate value of £1,250, but most survey answers put it at £4,000 or more.
Overall, more than 80% of people overestimated probate values.
‘Far too many families are unknowingly giving money away to the taxman,’ said Mark Littler, founder of Swift Values. ‘We see this time and time again – families doing their best to be honest, only to overpay because they’ve used replacement or insurance figures instead of probate values.
‘When people think about reducing inheritance tax, they imagine expensive solicitors and complex trusts. The reality is far simpler: just declaring personal possessions at their correct value can save families thousands, yet hardly anyone does it.’
Refunds eaten away by inflation
More than 18,000 claims for refunds for overpaid inheritance tax were made between April 2022 and April 2025. This figure was obtained from HMRC last year by insurance provider NFU Mutual following a freedom of information (FOI) request.
Most of the claims were due to property sales producing less than anticipated, followed by sales of shares that had fallen in value.
You can claim interest on any overpayments. But the rate paid by HMRC is calculated at a base rate minus 1% – so you’ll only get 2.75% (that’s less than inflation, which is currently at 2.8%).
In comparison, if you’re late making inheritance tax repayments, HMRC adds interest to your bill at base rate plus 4%.
Justine is now going through the refund process, armed with her professional contents valuation.
‘You’re sentimentally attached to the deceased person’s possessions and it’s hard to accept that those possessions may have far less value to anyone else,’ she said. ‘It’s therefore really helpful to have a detached, professional view of the house contents and jewellery.
‘While I do think we’ll eventually get the money back, it would obviously have been better not to have paid it in the first place.’
How to value an estate
- Property: Get a Royal Institute of Chartered Surveyors ‘red book’ survey, rather than an estate agent’s ‘market appraisal’.
- Contents: Look for ‘sold’ prices for similar items online, not listing prices, and take pictures of each item you’re selling and screenshots of sold prices in case HMRC later asks questions. If you think it’s worth more than £1,500, get a formal valuation, with specific valuations for any jewellery, art, antiques or collections.
- Valuation fees: If you only have one or two items you’re unsure about, it may be cheaper to get an online valuation than an in-person visit. Check fees from several firms before committing. You can deduct fees from an estate.
