Chattels: The personal possessions that can matter more than you think

When people think about making a Will, or dealing with an estate after someone has died, their minds often go straight to the obvious assets: the house, the bank accounts, investments and perhaps a pension. Those assets are important, of course. But they are not the whole story.

There is another category of property which can be easy to overlook, partly because it is so familiar. The contents of a home. The jewellery in a drawer. The paintings on the wall. The car in the garage. A treasured musical instrument. These are often referred to as chattels.

What are chattels?

In broad terms, chattels are tangible movable items. That means personal possessions which can be physically moved, as opposed to land, buildings, bank accounts or investments.

The legal definition is not quite as simple as “everything in the house”. Personal chattels will usually include furniture, pictures, jewellery, watches, vehicles, ornaments, collections, household contents and personal effects. However, money, securities, items used solely or mainly for business purposes, and items held solely as investments may fall outside the usual definition.

This distinction can matter. A painting bought because someone loved it and displayed it at home may be treated differently from an artwork bought purely as an investment and kept in storage.

Why they are sometimes forgotten

Chattels are often dealt with informally within families. Someone may say that a particular ring is “for my daughter”, or that a set of tools should go to a son or grandson. Sometimes those wishes are well known and agreed. Sometimes they are not.

The difficulty is that sentimental value and financial value are not always the same thing. A modest piece of furniture may be priceless to one beneficiary because of its family history. Equally, an item which looks unremarkable may turn out to have a significant open market value.

What happens to chattels when someone dies?

When a person dies, their chattels form part of their estate unless they were jointly owned or otherwise dealt with. The executors, if there is a Will, or the administrators, if there is no Will, are responsible for identifying them, protecting them, valuing them where necessary, and distributing them in accordance with the Will or the intestacy rules.

A Will may leave chattels to a particular person, divide them between beneficiaries, or give the executors discretion to distribute them. Some people also prepare a separate letter of wishes, setting out who they would like to receive particular items. A letter of wishes is not usually legally binding, but it can be very useful in guiding executors and reducing the risk of disagreement.

Where there is no Will, the rules of intestacy decide who is entitled to the estate. That can produce results which do not reflect what the deceased person would have wanted, particularly where personal possessions have strong sentimental importance.

The valuation point

For probate and Inheritance Tax purposes, chattels should generally be valued at their open market value at the date of death. This means the price the item might reasonably be expected to achieve if sold on the open market, not necessarily what it cost originally or what it is insured for.

This is an important difference. Insurance valuations are often based on replacement value and may be much higher than the likely sale value. On the other hand, family estimates can sometimes be too low, especially with jewellery, artwork, antiques, classic vehicles, watches, coins, stamps or specialist collections.

In straightforward estates, sensible estimates may be enough for ordinary household contents. Where there are valuable or unusual items, a professional valuation is often advisable.

How can chattels affect Inheritance Tax?

Inheritance Tax (IHT) is calculated by reference to the value of the estate as a whole, after taking account of available exemptions, reliefs and liabilities. Chattels are part of that calculation.

That may not matter where an estate is comfortably below the Inheritance Tax threshold, or where everything passes to a surviving spouse or civil partner and spouse exemption applies. However, where an estate is close to the taxable limit, the value of chattels can make a real difference.

For example, a house, savings and investments may appear to leave an estate just below the point at which tax is payable. If the deceased also owned jewellery, artwork and a vehicle worth a combined £40,000, the position may change. If those items have not been taken into account, the estate may be undervalued and the IHT account may be incorrect.

If tax is due, the rate can be significant. A relatively small number of valuable possessions can therefore have a larger impact than executors or beneficiaries might expect.

The risk of getting it wrong

Failing to take proper account of chattels can create several problems. The estate may pay too much tax if items are overvalued. It may pay too little tax if items are overlooked or undervalued. Either outcome can cause difficulties for executors, who have duties to the estate, the beneficiaries and HMRC.

There is also the practical risk of disputes. If a valuable item is removed from a property before it has been properly recorded, questions may arise later. Who took it? Was it gifted? Was it part of the estate? What was it worth?

These questions are much easier to answer if there is a clear Will, an up-to-date list of important items, and, where appropriate, reliable valuations.

What should you do?

If you are making or reviewing your Will, it is worth thinking carefully about your personal possessions. Are there particular items you want to leave to particular people? Are there items which might be more valuable than your family realises? Would a letter of wishes help?

If you are acting as an executor, take time at the start to identify and secure the deceased’s possessions. Do not assume that contents have little value simply because they are familiar. Equally, do not rely on insurance values without checking whether they reflect probate value.

Good advice at an early stage can prevent delay, reduce the risk of disputes, and help ensure that the estate is reported correctly for Inheritance Tax purposes.

A final thought

Chattels are sometimes described as “just the contents”. In many estates, they are much more than that. They can carry emotional significance, financial value and tax consequences.

Taking them seriously does not mean making matters complicated. It means making sure that personal possessions are properly considered, properly valued where needed, and properly dealt with when the time comes.

How Fraser Dawbarns can help

Whether you need to make your first Will, review and update an existing Will, or are a nominated executor for someone who has died, the Wills and estate planning team at

Fraser Dawbarns will be happy to help. With specialist private client lawyers in each of our offices – in King’s Lynn, Ely, Downham Market, March and Wisbech – we are particularly well placed to assist people in Norfolk and Cambridgeshire. For individual advice please contact any of our offices, or complete the enquiry form below and we’ll be in touch.

How To Contact Us:

To contact a member of our team, you can fill in our online enquiry form, email info@fraserdawbarns.com, or call your nearest office below. If you’d like to speak to a member of our team at one of our offices across Norfolk and Cambridgeshire, visit our offices page.

Wisbech: 01945 461456

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Downham Market: 01366 383171

This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.