When someone passes away, dealing with their estate involves numerous legal processes – one of the most important being the accurate valuation of their possessions for probate. Jewellery often represents not just monetary value, but deep sentimental significance as well. However, from a legal perspective, it’s the financial value that matters to HM Revenue & Customs.
For executors handling probate themselves, understanding the correct approach to jewellery valuation is crucial. Under UK law, all assets must be valued at their open market value at the date of death – and failing to do so accurately can lead to complications, delays and potentially significant penalties from HMRC.
This guide walks you through the essential steps for valuing jewellery during probate, helping you fulfil your legal responsibilities as an executor while ensuring the estate pays no more (and no less) inheritance tax than necessary. Whether you’re dealing with family heirlooms, antique pieces or modern jewellery collections, these straightforward steps will help you navigate this often complex process with confidence.
To learn all about the jewellery valuation services we offer, starting at just £25, read our guide to jewellery probate valuations here.
Understanding Probate Valuation Requirements
When valuing jewellery for probate, you need to understand the specific legal framework that governs this process in the UK. All assets must be valued at their “open market value” as of the date of death – this is explicitly defined in Section 160 of the Inheritance Tax Act 1984.
But what does “open market value” actually mean? It’s the price the jewellery would reasonably fetch if sold on the open market at that time – not what it was purchased for, not what it’s insured for, and not what it might cost to replace. For jewellery, this typically means what it would sell for at auction or to a dealer, which is often considerably lower than retail prices or insurance valuations.
HMRC has specific requirements about how jewellery should be reported. Any individual piece worth over £1,500 must be listed separately on the inheritance tax return (IHT400 form). If the total value of all household and personal goods is relatively low (under approximately £1,500), a reasonable estimate can be used without formal appraisal. However, for more valuable estates requiring the full IHT400, you’ll need to complete Schedule IHT407 for household and personal items, including detailed jewellery listings.
It’s important to note that HMRC expects executors to take “reasonable care” in valuations. For significant assets, this means obtaining professional valuations. If HMRC later determines that items were undervalued, they can impose penalties of up to 100% of the additional tax owed – making accuracy not just good practice, but financially prudent as well.
Alongside jewellery assessments, we offer complete probate valuation solutions for all estate items, from household contents to collectables. So no matter what you are dealing with, we can help.
Step 1: Collect and Document All Jewellery
The first crucial step in valuing jewellery for probate is to gather every piece that belonged to the deceased. This might seem straightforward, but jewellery can be stored in various locations, and missing items could lead to complications later.
Begin by checking obvious places like jewellery boxes, dressing tables and bedside drawers. Then expand your search to less obvious locations – safes, safety deposit boxes at banks, or items that might be with family members for safekeeping. Review any home insurance documents, which often list valuable pieces separately, and check if there’s a will that specifically mentions certain jewellery items.
As you collect each piece, create a preliminary inventory. Take clear photographs of each item from multiple angles, noting any distinctive features, hallmarks, maker’s marks or inscriptions. This photographic record serves two important purposes: it provides documentation for your records and can be useful if there are any discrepancies later.
It’s vital to keep all jewellery in its original condition. Don’t clean, polish or alter the items in any way before valuation, as patina, wear patterns and original condition can provide valuable information to professional valuers about age, authenticity and value. If any items appear to be missing compared to what you expected or what’s listed in documentation, make note of this as well – you may need to demonstrate to HMRC that you made reasonable efforts to locate everything.
If you’re managing probate for a large collection of jewellery, our complete jewellery probate valuation service guide provides all the information you need in one place.
Step 2: Assess Your Valuation Needs
Not all jewellery collections require the same approach to valuation. This step involves determining whether you need professional valuation services or if reasonable estimates might suffice.
For smaller estates with jewellery of modest value, HMRC accepts reasonable estimates. If the total value of all household and personal goods is likely under £1,500, and no individual piece appears particularly valuable, you might not need a formal valuation. However, making this assessment accurately requires some knowledge of jewellery values—something many executors lack.
Our £25 online valuations provide an excellent way to determine your actual valuation needs. This affordable service not only gives you a professional opinion from qualified gemmologists but can potentially save you hundreds of pounds on unnecessary in-person valuations if they’re not required. You’ll receive clear guidance on next steps if more comprehensive valuation is needed, while demonstrating to HMRC that you’ve taken reasonable care in your executor duties. All that is needed is a few images and you can start your valuation here.
For taxable estates (those above the inheritance tax threshold), professional valuations become essential. HMRC scrutinises these estates more closely, and using professional valuers demonstrates you’ve taken “reasonable care” in fulfilling your executor duties. Remember, if any individual piece is worth over £1,500, it must be itemised separately on inheritance tax forms.
Consider these risk factors when deciding:
- Is the estate likely to be taxable?
- Are there any pieces that appear valuable (precious metals, gemstones, designer pieces)?
- Do any items have potential historical or artistic significance?
- Would you be confident explaining your valuation method to HMRC if questioned?
Even for seemingly modest collections, it’s worth remembering that what appears to be costume jewellery can sometimes be valuable. There are numerous cases where executors have mistaken precious metals and gemstones for inexpensive materials. When in doubt, it’s always safer to seek professional assessment, as the cost of valuation is usually modest compared to the potential tax implications of significant undervaluation.
Step 3: Professional Valuation Options
When it comes to getting jewellery professionally valued for probate, executors have several options to consider based on the estate’s circumstances and requirements.
Professional jewellery valuers should have relevant qualifications and significant experience in assessing jewellery. The most relevant credentials for jewellery valuation include qualifications from the Gemmological Association (FGA), Diamond diplomas (DGA), and Professional Jewellers Diplomas. These specialised qualifications ensure the valuer has expert knowledge of gemstones, precious metals and jewellery construction – essential for accurate probate valuations that will be accepted by HMRC.
At Swift Values, all jewellery valuations are carried out by qualified specialists with extensive experience in both contemporary and antique jewellery assessment. A typical valuer holds the Fellow of the Gemmological Association (FGA) qualification, Diamond diploma (DGA), and Professional Jewellers Diploma, backed by decades of practical experience in the field.
The valuation approach you choose may depend on several factors, including the estimated value of the collection, time constraints, geographical location, and whether the estate is likely to face HMRC scrutiny. Some estates benefit from comprehensive in-person assessments, while others might be suited to more streamlined remote valuation services.
Whatever option you choose, ensure the valuer understands that the valuation is specifically for probate purposes and needs to reflect open market value in accordance with HMRC requirements. The right professional can guide you through this process while helping you fulfil your executor duties appropriately.
You can learn about our in person and online valuations (from just £25) here.
Step 4: The Valuation Process Explained
Understanding what happens during a professional jewellery valuation can help executors prepare properly and know what to expect from the process.
For in-person valuations, the jewellery specialist will examine each piece carefully, often using specialised equipment like loupes, microscopes, and gemstone testing tools. They’ll assess the materials (identifying precious metals and gemstones), craftsmanship, age, condition, and any designer or maker’s marks. This thorough examination allows them to determine the open market value – what the item would likely sell for if offered on the market at the time of death.
Online valuations provide an excellent starting point if you’re unsure about the value of items in the estate. At just £25 per item, these assessments offer a cost-effective way to demonstrate “reasonable care” to HMRC while helping you determine if a more comprehensive in-person valuation is actually necessary. This approach not only satisfies your legal obligations but potentially saves you money by avoiding unnecessary expenses on in-person valuations for items that don’t warrant them.
Following any assessment, you’ll receive a formal valuation report that typically includes:
- Detailed descriptions of each significant piece
- Clear photographs documenting the items
- The open market value for each item as of the date of death
- An explanation of how values were determined
- Confirmation that the valuation complies with HMRC requirements
Most professional valuations are completed within a week, though timeframes vary depending on the size and complexity of the collection. The documentation provided will serve as evidence for probate applications and should be retained in case HMRC requests further information about how the values were determined.
This formal documentation demonstrates that you’ve taken “reasonable care” as an executor and provides a solid foundation for completing the necessary inheritance tax forms accurately.
Step 5: Using Valuations in Probate Applications
Once you have your professional jewellery valuations in hand, the next step is incorporating this information correctly into the probate application process.
For estates below the inheritance tax threshold, you’ll need to include the total value of personal possessions (including jewellery) on the probate application form. While you won’t need to submit the detailed valuation reports with your application, keep them safely filed in case of future queries.
For estates that exceed the inheritance tax threshold, more detailed reporting is required. You’ll need to complete the full inheritance tax form (IHT400) along with the supplementary form IHT407 for household and personal goods. On the IHT407, any jewellery items valued over £1,500 must be individually listed with their specific values. Items worth less can be grouped together.
When submitting these forms, remember:
- Use the exact values provided in your professional valuation report
- Include the valuer’s details when prompted on the forms
- Attach copies of the valuation reports if submitting a paper application
- Keep original valuation documents in your records
HMRC may review valuations, particularly for higher-value estates. In some cases, they might request additional information or even commission their own valuation. Having professional documentation from a qualified jewellery specialist significantly reduces the likelihood of challenges.
It’s worth noting that HMRC can cross-reference information from various sources, including bank statements that might show substantial jewellery purchases. This is another reason why professional, accurate valuations are essential – they demonstrate transparency and good faith in your role as executor.
The values established through this process will also be important when distributing the estate or if items need to be sold to cover inheritance tax liabilities, ensuring fairness to all beneficiaries.
Conclusion
Obtaining accurate jewellery valuations for probate may seem like just one more task on a long list of executor duties, but it’s an area where attention to detail truly matters. By following the steps outlined in this guide, you can navigate this process with confidence while fulfilling your legal obligations.
Proper valuation ensures the estate pays the correct amount of inheritance tax – not too much and not too little. It provides clarity for beneficiaries about the true value of what they’re receiving and offers protection for executors by demonstrating they’ve taken reasonable care in administering the estate.
Our online valuations at just £25 per item represent an excellent way to demonstrate “reasonable care” to HMRC while potentially saving you hundreds of pounds in unnecessary in-person valuation fees. This initial assessment helps determine whether items truly warrant the more comprehensive approach, ensuring you’re only paying for the level of service the estate actually needs.
As you work through the probate process, keep in mind that our experienced, qualified jewellery specialists are available to provide guidance at every stage. Whether you need online assessments to determine if items warrant further valuation or comprehensive in-person services for valuable collections, we’re here to help you handle the estate with the care and diligence it deserves.
Ready to get started? Book your jewellery valuation today here or contact our team at enquiries@swiftvalues.co.uk or 0330 088 4099 for more information.
