Open market value is the price an item would fetch in a real, unforced sale on the open market at the date of death. HMRC’s own published guidance goes further and tells you where to find that price: a sale after death, particularly at auction, is the best evidence of it. This is not our opinion or an industry convention. It is HMRC’s stated position, written down in its own manuals.

Where the answer actually lives: HMRC’s Inheritance Tax Manual

The Inheritance Tax Manual is HMRC’s internal guidance for its own officers, published openly on GOV.UK. It is the set of instructions HMRC follows when it looks at a valuation and decides whether to accept it, so it is the most direct evidence there is of how HMRC actually thinks about value. The statutory root is section 160 of the Inheritance Tax Act 1984, which defines value as the open market price. The practical answer to what this means sits across two pages of the manual: one defines the market, the other tells you where to find real evidence of it.

First, what “open market” means (IHTM09704)

The manual page at IHTM09704 sets out a hypothetical sale that is not sudden or forced. It assumes “a willing seller – this means someone who is neither in a rush, nor reluctant, to sell but someone who is prepared to sell if offered a reasonable price, and a willing buyer – this means a prudent person who has the will and money to buy but again is not anxious, nor unduly reluctant, to purchase.” That is the market HMRC has in mind: an orderly sale between two reasonable people, neither of them under pressure.

Then the key point: HMRC’s own best evidence (IHTM21041)

Here is the line the whole question turns on. At IHTM21041, HMRC states: “Generally, sales after the death, particularly those at auction, provide the best evidence of the open market value at the date of sale.”

The reason is straightforward once you hold the two pages together. An auction is the willing seller and willing buyer sale from IHTM09704 actually happening. The whole market is in the room, the item is properly exposed to competition, and the price is set by real bidders spending real money. None of it is hypothetical. So where a genuine sale exists, HMRC does not want a guess or an estimate standing in for it. The hammer price is the benchmark. Worth being clear about: this is HMRC’s own conclusion, not ours. We simply happen to run the exact process HMRC describes as best evidence.

So when HMRC asks you for open market value, it is asking, in its own words, for what an item would realistically fetch at auction.

What open market value is not

The most common mistake grieving executors make is reaching for an insurance or replacement figure. Those numbers reflect the cost of buying a new equivalent, which usually sits well above what the used item would actually resell for, so using them inflates the estate and the tax bill. A sofa bought for a four-figure sum might resell second hand for a small fraction of that, and it is the resale figure HMRC wants. A valuation labelled “for probate purposes” does not settle it either. HMRC notes that where a valuation is described that way, it may want to “confirm with the taxpayer or agent that the open market value has been used.” The label is not the same as the basis.

So who works out the auction figure?

Reading through HMRC’s manuals is not what most people signed up for when they agreed to be an executor, and if this has landed on your shoulders at a hard time, the reassurance is a simple one. The process HMRC calls best evidence is exactly what a proper probate valuation, and where it makes sense a genuine sale, provides. If you would rather not work it out alone, we can help with a probate valuation prepared on the open market basis HMRC asks for.