Definition
Assets are everything you own that has value—including property, savings, investments, personal possessions, and digital accounts—which together form your estate when you die.
Identifying all your assets is the essential first step in estate planning, as you can only distribute what you've properly documented.
What Do Assets Mean?
In UK law, assets refer to everything you own that has monetary value at the time of your death. Under the Inheritance Tax Act 1984, HMRC defines the estate as "all the assets (property, money, possessions) owned by the deceased at the date of death, less any liabilities." Traditionally, English law divides assets into two main categories: real property (land and buildings permanently fixed to the ground) and personal property (everything else you own). Personal property splits further into tangible chattels—physical items like furniture, cars, and jewellery—and intangible assets such as bank accounts, shares, and investments.
Today's estates encompass a far wider range than ever before. Traditional assets include residential and commercial property, savings and investment accounts, vehicles, jewellery, furniture, and collectibles. Sarah, a 32-year-old marketing manager from Bristol, discovered when creating her first will that her assets totaled £260,750—far more than she'd realized. Her one-bedroom flat (£215,000), savings (£20,500 in accounts and ISAs), car (£11,000), and personal possessions (£5,250) were expected. But she also had £450 in cryptocurrency, an Etsy shop generating £300 monthly, and an Instagram account with 8,500 followers she used for freelance work. These digital assets are increasingly common but often overlooked.
Modern estates must also account for digital assets such as cryptocurrency holdings, online business interests, domain names, social media accounts with commercial value, and digital media libraries. The Property (Digital Assets etc.) Bill, which passed second reading in 2025, formally recognizes digital assets as a third category of personal property in England and Wales. Some assets—such as life insurance policies with nominated beneficiaries and pension death benefits—may pass directly to named individuals outside your will. These are still assets, but they bypass probate. It's crucial to identify all your assets, not just the most valuable, as even small items can have significant sentimental importance to beneficiaries.
Identifying all your assets is the foundation for creating an effective will. Your executor will need to locate, value, and distribute every asset you own—a task that becomes dramatically more difficult without an asset register. For Inheritance Tax purposes, HMRC requires a complete valuation of your estate using "open market value"—the price the property might reasonably fetch if sold. The current nil-rate band of £325,000 means estates above this threshold face 40% tax on the excess. Many people discover during estate planning that they own more than they realized, or that certain assets like jointly-owned property or business interests require special consideration. Maintaining an up-to-date list of your assets, including account numbers, locations, and estimated values, is one of the most helpful things you can do for your executors and beneficiaries.
Common Questions
"What assets do I need to include when making a will?" You should list all assets you want to distribute specifically—property, valuable items, savings, investments, and sentimental possessions. Everything not specifically gifted forms your residuary estate which passes to your residuary beneficiaries. Don't forget digital assets like cryptocurrency, online businesses, or valuable social media accounts.
"Do I need to include my pension and life insurance as assets in my will?" Most pensions and life insurance policies pass outside your will to beneficiaries you've named directly with the provider through an expression of wish form. They're still assets, but they bypass probate. Review these nominations regularly to ensure they align with your current wishes, especially after major life changes.
"How do I work out the total value of my assets for Inheritance Tax?" Add up the market value of everything you own at death: property at current market value, savings, investments, vehicles, jewellery, and personal possessions. Include jointly-owned assets (usually 50% of the value) and gifts made in the seven years before death. Deduct any debts to get your net estate value.
Common Misconceptions
Myth: Assets only include valuable items like property and savings—everyday possessions don't count.
Reality: All possessions with any value are technically assets, from your £300,000 house to your £50 watch collection. While executors won't separately value every book, HMRC requires a reasonable estimate of household contents as part of estate valuation. What seems ordinary to you might be treasured by a beneficiary—wedding rings, photo albums, or family heirlooms often cause disputes if not specifically addressed.
Myth: Digital assets like social media accounts, cryptocurrency, and online businesses aren't real assets and don't need to be included.
Reality: Digital assets are absolutely real assets with real value. A cryptocurrency portfolio might be worth tens of thousands of pounds, an Instagram account with 50,000 followers could generate ongoing income, and a Shopify store might be someone's primary business. The Property (Digital Assets etc.) Bill 2025 specifically addresses digital assets in estate planning. Without proper planning, digital assets can become permanently inaccessible after death.
Related Terms
Understanding assets connects to these related concepts:
- Estate: Your estate is the sum of all your assets minus your liabilities, representing the total value subject to Inheritance Tax.
- Liabilities: The counterpart to assets—liabilities are what you owe, and both must be considered together to determine net estate value.
- Chattels: A specific category of assets, namely tangible personal property like furniture, jewellery, and vehicles that you can move.
- Real Property: Land and buildings form a special category of assets with unique estate planning considerations.
- Digital Assets: Modern estates increasingly include online accounts, cryptocurrency, and digital businesses that require specialized planning.
Related Articles
- Understanding Your Estate Value: Learn how your identified assets combine to determine whether your estate faces Inheritance Tax.
- How to Distribute Property in Your Will: Discover strategies for allocating your most valuable assets to beneficiaries effectively.
- Digital Assets and Estate Planning: Essential guidance for protecting cryptocurrency, online businesses, and social media accounts in your will.
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Legal Disclaimer: This glossary entry provides general information about UK legal terminology and does not constitute legal advice. For advice specific to your situation, consult a qualified solicitor.