The Car Was Sold After the Death: Which Value Goes on the Probate Forms?
Both, in separate boxes. HMRC's form asks for what the car actually sold for and, separately, what it was worth on the day the person died. The second figure is the one that counts for inheritance tax. The first is usually the best evidence of it, but not always, and knowing when it isn't saves a lot of back and forth later.
Selling the car is often one of the first practical jobs an executor tackles. It sits on a driveway, it costs money to insure and tax, and a buyer turns up. Then the inheritance tax paperwork arrives and the question is obvious: do I put down what I got for it, or what it was worth when they died? People ask it on forums all the time, and the replies usually split between "use the sale price" and "HMRC only cares about the date of death". Each answer is half of the picture.
Need the value at the date of death documented? Get a price for a date of death valuation.
What the form actually asks for
Where an estate needs a full inheritance tax account, cars go on schedule IHT407, "Household and personal goods". Box 2 covers "cars, including vintage and classic", along with motorcycles, other vehicles, boats and aircraft. For each one it asks for the manufacturer, model, year, registration, and the "Condition at the date of death and mileage for cars".
Then come two separate columns. One reads: "If the item has been sold, enter the date of the sale and gross sale proceeds". The other reads: "Open market value at date of death". So the form does not make you choose. If the car has gone, it expects to see both numbers side by side, and it will notice if they are far apart without an explanation.
Under the box there is one more line: "If you have a professional valuation, enclose a copy."
Why the sale price is usually the strongest evidence
HMRC's internal manual on valuing household and personal goods is direct about this: "Generally, sales after the death, particularly those at auction, provide the best evidence of the open market value at the date of sale." That guidance is written for personal goods in general rather than for cars in particular, but a car is a personal good, and the logic is the same. A real buyer paying real money in an open sale is harder to argue with than any estimate.
Notice the last four words, though: at the date of sale. A sale tells you what the car was worth when it sold. If that was shortly after the death and nothing about the car changed in between, the two figures should be close. The same manual allows for an adjustment for "market movement between the dates of death and of sale", which is an acknowledgement that the gap can matter.
Which costs you can and can't take off
This is where the most common slip happens. Selling a car costs money: auction commission, a listing fee, a recovery truck, a new battery to get it running for a viewing. It feels natural to take those off and report what the estate actually received.
HMRC's guidance says otherwise. For an auction, the price to use is "the gross proceeds of sale (or hammer price) before deduction of commission and insurance and without addition of any buyer's premium". And more broadly: "any costs incurred after the date of death are administration expenses and therefore not deductible." That matches the wording on IHT407 itself, which asks for gross sale proceeds. The costs are real, but they belong in the estate accounts, not in the value of the car.
When a sale is weak evidence of the date of death value
A sale is only good evidence when it looks like the open market sale HMRC's definition describes. In our experience these are the situations where the sale price and the date of death value can drift apart, and where it is worth having more than the sale to rely on:
| Situation | Why the sale price may not reflect the value at death |
|---|---|
| A quick sale to a dealer or instant buying site | That is a trade price, set to leave room for the buyer's margin. It is a sale, but not necessarily the price the car would have fetched "advertised publicly". |
| A sale to a relative or beneficiary | There was no open market. The price agreed between people who know each other says little about what a stranger would have paid. |
| A long gap between death and sale | Used car prices move. Months later, the sale may reflect a different market from the one on the date that matters. |
| The car changed in between | A car left standing for months can come out with a flat battery, seized brakes or damage. That is its condition at the sale, not at the death, and IHT407 asks specifically about condition at the date of death. |
| An unusual car | Classics, imports, modified or rare cars can sell well above or below a typical figure depending on who happened to be looking that week. |
None of these makes the sale irrelevant. It still goes in the sale proceeds column. What it means is that the date of death figure next to it needs its own support, so that a difference between the two has a reason attached.
Sold quickly, privately, or months later? That is when the date of death figure needs its own support, based on the car's condition on that date.
Get a price for a retrospective valuationYour price is confirmed in writing before any work begins.
If the car sold for less than the value you declared
Some executors put a value on the forms first and sell afterwards, and the sale comes in lower. For certain assets there is a formal route to reduce the tax. HMRC's notes put it this way: "If shares listed on the stock exchange are sold within 1 year of the date of death, or land and buildings are sold within 4 years of the date of death, for less than the value included on form IHT400, we may be able to reduce the Inheritance Tax."
Cars are not on that list. So a lower sale price does not by itself reduce anything. What it can do is raise the question of whether the date of death figure was right to begin with, particularly if the sale was soon after the death and on the open market. That is a conversation to have with HMRC or the estate's solicitor, not an adjustment to make quietly.
If it sold for more
The reverse happens too, especially with classic and enthusiast cars. Two separate questions arise.
On Capital Gains Tax, the answer for an ordinary car is generally reassuring. Section 263 of the Taxation of Chargeable Gains Act 1992 says a passenger vehicle, other than one "of a type not commonly used as a private vehicle and unsuitable to be so used", "shall not be a chargeable asset; and accordingly no chargeable gain or allowable loss shall accrue on its disposal". GOV.UK's own summary lists your car as the exception to Capital Gains Tax on personal possessions. If the vehicle was used in a business, or is something other than a normal passenger car, check with the estate's accountant.
On inheritance tax, a higher sale price is evidence too, and it points the other way. If the car sold soon after the death for well above the declared value, HMRC can reasonably read that as a sign the date of death figure was too low. A documented valuation that explains the difference, a rising market, a buyer paying a premium for a rare specification, is what turns that from a query into a note on the file.
If the sale price and the declared value are far apart, get a price for a date of death valuation that explains the gap.
Do you need a professional valuation?
Not automatically. HMRC's notes say you do not have to get a professional valuation for ordinary household and personal goods "where you can use publicly available data to estimate the value, for example, to value second hand cars". The same passage continues: "If you think any item may be worth more than £1,500, or you're not sure, we advise you to get a professional valuation."
If the car was sold on the open market within a few weeks of the death, the sale may be all the evidence you need. Where the sale falls into one of the situations in the table above, or the car is worth well over £1,500 and the public data doesn't really describe it, a retrospective valuation fixes the figure at the date of death, on the car's condition at that date, with the comparables written down. That is also what you would enclose with IHT407.
Frequently asked questions
If the car has already been sold, which value goes on form IHT407?
Both. The vehicles box on IHT407 has one column for the date of sale and gross sale proceeds, and a separate column for the open market value at the date of death. The value that counts for inheritance tax is the date of death figure. The sale is evidence of what that figure should be.
Can I deduct auction fees or selling costs from the car's value?
No. HMRC's guidance treats the auction price as the gross proceeds of sale, before commission and insurance are deducted, and says that costs incurred after the date of death are administration expenses and therefore not deductible from the value of the item.
The car sold for less than the value I declared. Can I reduce the inheritance tax?
HMRC's notes describe a reduction when quoted shares are sold within one year of death, or land and buildings within four years, for less than the value declared. Cars are not on that list. For a car, the real question is whether the date of death figure was right in the first place, and that is worth raising with HMRC or your solicitor rather than assuming.
Is there Capital Gains Tax if the car sold for more than its probate value?
Generally not. Under section 263 of the Taxation of Chargeable Gains Act 1992, a passenger vehicle of a type commonly used as a private vehicle is not a chargeable asset, so no chargeable gain arises when it is sold. A higher sale price can still be read as evidence that the date of death value was higher than declared.
Do I need a professional valuation if the car was sold?
Not necessarily. A genuine open market sale soon after the death can be good evidence on its own. A valuation is worth having when the sale was quick, private, to someone connected with the estate, long after the death, or when the car's condition changed in between. HMRC's notes advise a professional valuation if you think an item may be worth more than £1,500, or you're not sure.
Need the value at the date of death pinned down?
We prepare retrospective probate valuations based on the car's condition on the date of death, with the comparables set out, usually within a few hours.
Get a price for my date of death valuationYour price is confirmed in writing before any work begins.