Chattels – Difficulties In Valuing Assets

When dealing with a Will, chattels are assets such as furniture and everyday possessions, as opposed to property and investments. Valuing chattels is an increasing problem for executors dealing with the administration of the estate. While houses and investments are relatively easy to value with the help of estate agents and financial advisers, chattels are much harder to value.

The general increase in estate values over the years, mostly due to increasing property prices, means that on their death more and more are liable to pay Inheritance Tax (IHT) – the threshold is £325,000. Where IHT must be paid, it is vital to obtain a realistic and justifiable open market value for chattels. Due to a rise in living standards, many people now also own a substantial amount of chattels.

Valuing chattels

When valuing assets for probate purposes, the open market value is generally the appropriate valuation. That is the value for which the items could be sold between a willing buyer and a willing seller.

Professional valuers should be used to value specialist assets such as art, stamp, book and coin collections if they are likely to be of significant value. Cars can be valued by using a trade guide and boats can be valued by a yacht broker. Even internet auction sites can be used to value widely traded items such as musical instruments.

If any items have been specifically noted in the Will, these should be separately valued. As a general rule, items worth more than £500 should be assessed individually.

If there are a lot of chattels to consider, it can be difficult for executors to know which are valuable. In house clearances, for example, it is possible for valuable chattels to be discarded or disposed of for less than they are worth.

It is also helpful to know the value of chattels before they are distributed to the beneficiaries so that they are equally distributed.