Form IHT405: Reporting the Deceased's House and Land — A Worked Valuation Example
Form IHT405 is where you tell HMRC about every house, flat and piece of land the deceased owned. Each property gets its own row showing its address, postcode, tenure (freehold or leasehold) and — the figure that really matters — its open-market value at the date of death. This guide walks one full estate through the form, including a £425,000 family home, a £90,000 buy-to-let, a jointly owned share, and exactly which IHT400 boxes the totals flow into.
If you are filling in the full Inheritance Tax account (form IHT400), you need a separate schedule for almost every type of asset. IHT405 is the schedule for "houses, land, buildings and interests in land." HMRC's own instruction is plain: "Fill in this form to give details of all the land and buildings or rights over land (such as fishing rights) owned by the deceased" (GOV.UK IHT405).
The form looks intimidating because it is built as a grid, but once you understand what each column is for and how the bottom line feeds back into IHT400, it is mechanical. The hard part is never the form — it is arriving at a defensible open-market value. We will do both.
What each column on IHT405 actually captures
The current form (HMRC version 04/26) has its main property grid at box 6 — "Deceased's residence" on page 2, and a second grid at box 7 — "Other land, buildings and rights over land" on page 3. Both grids use the same eight lettered columns:
| Column | What goes in it |
|---|---|
| A — Item number | Number each property 1, 2, 3… Re-use the same item numbers later if a property has special factors (box 8) or has been sold (box 11). |
| B — Full address or description | The address. For farmland or land with no street number, enclose a plan showing the boundaries. |
| C — Postcode | The property's postcode. |
| D — Tenure | Freehold or leasehold. If leasehold, state the years left on the lease and the annual ground rent. |
| E — Details of lettings / leases | If let out, give the tenancy details (or enclose the lease). If the property was empty at death, write "vacant." |
| F — Relief at 100% | Value qualifying for Agricultural / Business Relief at 100%, Woodlands Relief or heritage exemption. |
| G — Relief at 50% | Value qualifying for Agricultural or Business Relief at 50%. |
| H — Open-market value at the date of death | The headline figure: the price the property would fetch on the open market on the day the person died. |
"Open-market value at the date of death" means the price the property would reasonably be expected to fetch if sold on the open market on the day of death — a willing buyer and a willing seller, no rushed sale, no special-purchaser premium. This is the statutory basis ("market value" under s.160 Inheritance Tax Act 1984). It is not the price the family hopes for, and it is not the figure on an old Zoopla estimate. HMRC may refer any property valuation to the Valuation Office Agency, so the number has to be supportable.
Where the relief columns and totals go on IHT400
The form tells you, at the foot of each grid, exactly where the total travels:
- Box 6 grid (residence) — total of column H → copy to IHT400 box 51.
- Box 7 grid (other land) — total of column H → include in IHT400 boxes 68 to 70.
- Any relief in columns F and G → also enter the total relief on IHT400 box 93, and complete IHT413 (Business Relief) or IHT414 (Agricultural Relief) as well.
A full worked example: the Whitfield estate
The facts. Margaret Whitfield, a widow, died on 12 March 2026. Her son James is the executor. She owned:
- The family home — 14 Elm Crescent, Harrogate, HG2 8RT. Freehold. She owned it outright (100%). A local RICS valuer assessed the open-market value at the date of death as £425,000. There is no mortgage.
- A buy-to-let flat — Flat 3, 22 Riverside Court, Leeds, LS1 4DJ. Leasehold, 92 years remaining, ground rent £150 a year. Let to a tenant on an assured shorthold tenancy. Two written estate-agent appraisals came back at £88,000 and £92,000. James adopts £90,000.
- A half-share of a holiday cottage in the Lake District, owned as tenants in common with her sister. The whole cottage is worth £300,000, so her 50% share has an arithmetic value of £150,000 (more on the discount below).
Step 1 — list the wholly owned properties in the box 6 grid. The home is her residence; the buy-to-let is "other land," so it goes in the box 7 grid on page 3. (HMRC puts the main dwelling in box 6 and lets you list secondary/investment property in box 7 — both use column H for open-market value.) For clarity, here is how James fills the columns:
| Item | Address (B / C) | Tenure (D) | Lettings (E) | Open-market value (H) |
|---|---|---|---|---|
| 1 (box 6) | 14 Elm Crescent, Harrogate · HG2 8RT | Freehold | Vacant | £425,000 |
| 2 (box 7) | Flat 3, 22 Riverside Court, Leeds · LS1 4DJ | Leasehold, 92 yrs left, £150 ground rent | Let — AST, see enclosed lease | £90,000 |
Step 2 — carry the totals into IHT400.
- Total of column H in the box 6 grid = £425,000 → IHT400 box 51.
- Total of column H in the box 7 grid = £90,000 → IHT400 boxes 68–70.
Step 3 — the jointly owned cottage does not go on IHT405 at all. Jointly owned property is reported on its own schedule, IHT404 ("Jointly owned assets"), not IHT405. This trips up many executors. Below we show how the survivorship discount is applied there.
Jointly owned property and the survivorship discount
Margaret's half of the Lake District cottage is "an interest in land," but because it is jointly held it belongs on form IHT404, not IHT405. The mechanics of the valuation are the part everyone asks about.
You start with the arithmetic share — here 50% of £300,000 = £150,000. But a half-share in a house that you cannot sell on your own, and that someone else is living in, is worth less on the open market than half the vacant-possession value. HMRC therefore accepts a discount for joint ownership (often called the survivorship or co-ownership discount) to reflect that reduced marketability. The discount is agreed case by case with the Valuation Office Agency; in practice a deduction in the region of 10%–15% is commonly accepted for a share co-owned with someone other than a spouse, with the exact figure depending on who occupies the property and the relationship between the owners.
James's RICS valuer supports a 10% discount on Margaret's share because her sister was living in the cottage and would not be a forced co-seller:
- Whole property: £300,000
- Margaret's arithmetic share (50%): £150,000
- Less 10% joint-ownership discount: −£15,000
- Value reported on IHT404 for the share: £135,000
Two important caveats. First, the discount is not automatic — you must justify it, ideally with a valuer's letter. Second, no discount applies where the property passes to (or was co-owned with) a spouse or civil partner, because HMRC takes a "related property" view that values the combined holding; and in any event a transfer to a surviving spouse is usually exempt, so the discount would make no difference to the tax.
Tenants in common vs joint tenants
How co-owners hold the property changes who inherits, but both go on IHT404:
- Tenants in common (Margaret's case) — each owns a distinct share that passes under their will. You report the deceased's share value (after any discount).
- Joint tenants — the deceased's share passes automatically by survivorship to the co-owner, but it is still part of the estate for IHT and must be valued and reported on IHT404, again with any appropriate discount.
RICS valuation vs an estate-agent figure: when to pay for which
HMRC does not insist on a formal valuation for every property, but it does expect a figure it can stand behind. If a professional valuation exists, the form tells you to "enclose a copy with the completed form." The practical rule of thumb:
| Situation | What's usually enough | Why |
|---|---|---|
| Standard house/flat, estate comfortably below the nil-rate band, no tax to pay | Two or three written estate-agent appraisals; adopt a sensible middle figure | Low risk; the figure won't change the tax due |
| Estate near or over the threshold, so IHT is actually payable | A formal RICS "Red Book" valuation at date of death | It is the most defensible basis if the Valuation Office Agency challenges the figure — and it caps your exposure to interest and penalties on an under-valuation |
| Property with development potential, damage, an unusual lease, or farmland claiming Agricultural Relief | A specialist RICS valuer (and complete box 8 / IHT414 as needed) | "Special factors" can swing the value by tens of thousands; an agent's window-display estimate won't hold up |
| Property already sold within 12 months | The actual sale price (see box 11) | HMRC will generally accept the genuine arm's-length sale price as the date-of-death value |
An estate agent's "marketing appraisal" is an opinion designed to win an instruction, not a valuation under a professional standard. For Margaret's £425,000 home — which pushes the estate into IHT territory once everything is added up — James was right to commission a RICS valuation. For the £90,000 flat, two written agent appraisals averaged to a defensible figure are proportionate.
How the IHT405 figures feed the nil-rate bands — and which property qualifies for the RNRB
Once your property values are on IHT400 via boxes 51 and 68–70, they form part of the total estate that the nil-rate bands are set against. For deaths in the 2025/26 and 2026/27 tax years:
| Allowance | Amount | Key condition |
|---|---|---|
| Nil-rate band (NRB) | £325,000 | Applies to every estate; frozen to 5 April 2031 |
| Residence nil-rate band (RNRB) | £175,000 | Only if a qualifying residence is left to direct descendants; frozen to 5 April 2030 |
| Taper threshold | £2,000,000 | RNRB reduces by £1 for every £2 the estate exceeds £2m |
| Standard IHT rate | 40% | On the estate above the available bands (36% if 10%+ left to charity) |
Source: GOV.UK — Inheritance Tax and HMRC thresholds and interest rates.
Crucially, not every property on IHT405 qualifies for the RNRB. The residence nil-rate band only attaches to a home the deceased lived in at some point, and only to the extent it is inherited by direct descendants (children, grandchildren, step-children, adopted children, and the like — see GOV.UK RNRB guidance).
Margaret leaves everything to her son James. Assume her total estate (home £425,000 + buy-to-let £90,000 + cottage share £135,000 + £40,000 in savings) is £690,000, with no debts.
- Which property gets the RNRB? Only 14 Elm Crescent (her home) qualifies, because she lived there and it passes to a direct descendant. The buy-to-let flat and the holiday-cottage share do not qualify — she never lived in them. Since the home (£425,000) exceeds the £175,000 RNRB, the full RNRB is available.
- As a widow, Margaret can also claim her late husband's unused NRB and RNRB (transferable bands), if they were unused on his death — but for this example assume only her own bands.
- Total tax-free bands: £325,000 (NRB) + £175,000 (RNRB) = £500,000.
- Taxable estate: £690,000 − £500,000 = £190,000.
- IHT at 40%: £76,000.
Had the home been left to a niece instead of a direct descendant, the RNRB would be lost entirely, the bands would be only £325,000, and the tax would jump to (£690,000 − £325,000) × 40% = £146,000 — a £70,000 difference driven solely by who inherits the residence. That is why getting the IHT405 entries and the RNRB claim right matters so much.
- Column H is the number that counts: open-market value at the date of death — a willing-buyer/willing-seller figure, not an aspirational price.
- The main home goes in the box 6 grid (total → IHT400 box 51); other land goes in the box 7 grid (total → IHT400 boxes 68–70).
- Jointly owned property goes on IHT404, not IHT405 — and you can usually deduct a survivorship discount (commonly ~10–15% for a non-spouse share), but only with justification.
- Pay for a RICS valuation when IHT is actually payable or the property is unusual; two written agent appraisals are fine for low-risk, no-tax estates.
- Only a home the deceased lived in, passing to direct descendants, attracts the £175,000 RNRB — buy-to-lets and holiday homes never do.
Frequently asked questions
Which IHT400 box does the IHT405 total go to?
The total of column H in the box 6 "Deceased's residence" grid is copied to IHT400 box 51. The total of column H in the box 7 "Other land, buildings and rights over land" grid is included in IHT400 boxes 68 to 70. Any Agricultural, Business or Woodlands relief shown in columns F and G is also entered on IHT400 box 93.
Do I list jointly owned property on IHT405?
No. IHT405 is for property the deceased owned outright. Jointly owned houses and land — whether held as joint tenants or tenants in common — go on form IHT404, "Jointly owned assets." You still value and report the deceased's share, usually after a joint-ownership (survivorship) discount.
What is the joint-ownership / survivorship discount, and how much is it?
It is a reduction to reflect that a part-share in a property someone else occupies is worth less on the open market than its simple arithmetic fraction. There is no fixed statutory percentage — it is agreed case by case with the Valuation Office Agency — but a deduction of roughly 10%–15% is commonly accepted for a share co-owned with someone other than a spouse. No discount applies to property co-owned with, or passing to, a spouse or civil partner.
Do I need a RICS valuation, or will an estate agent's figure do?
If the estate is comfortably below the nil-rate band so no tax is due, two or three written estate-agent appraisals and a sensible middle figure are usually proportionate. If Inheritance Tax is actually payable, or the property is unusual (development potential, damage, agricultural land), commission a formal RICS "Red Book" valuation — it is the most defensible basis if HMRC's Valuation Office Agency challenges the figure. If a professional valuation exists, enclose a copy with the form.
Does the buy-to-let qualify for the residence nil-rate band?
No. The RNRB (£175,000 for 2025/26 and 2026/27) only applies to a property the deceased actually lived in as a home, and only to the extent it is inherited by direct descendants such as children or grandchildren. A buy-to-let, holiday home or commercial property the deceased never occupied does not qualify.
What value do I use if the property is sold soon after death?
Box 11 of IHT405 asks whether any property has been sold, or will be sold, within 12 months of death. If a genuine arm's-length sale completes around that time, HMRC will generally accept the actual sale price as the date-of-death value, and you can elect to use it on the form.
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