Although the Tokyo Metropolitan Institute of Gerontology Index of Competence (TMIG-IC) is useful to assess decline of instrumental activities of daily living (IADL) in Japanese individuals, limited data are available in patients with heart failure (HF). This study was performed to investigate the prognostic value of IADL evaluated by TMIG-IC in initial HF hospitalization patients aged ≥ 65 years. We reviewed 297 elderly HF patients with independent basic ADL before hospitalization. Patients with prior HF were excluded. Five TMIG-IC items were investigated as IADL parameters. Patients with full IADL scores were defined as “independent” and others were defined as “dependent”. The endpoint was all-cause mortality, and multivariable analysis was performed to identify IADL risk. The median age was 76 years, and 55% of the patients were male. Forty-one deaths occurred over a median follow-up period of 1.01 years. After adjusting for existing risk factors, including Seattle Heart Failure Score, dependent patients had higher mortality risk than independent patients [hazard ratio 3.64, 95% confidence interval (CI) 1.57–8.43], and mortality risk decreased by 16% for each 1-point increase in IADL score (hazard ratio 0.84, 95% CI 0.71–0.99). In conclusion, limited IADL indicated by TMIG-IC was associated with poorer long-term mortality rate in elderly patients with HF. This inexpensive and easily applicable tool will support decision making in cardiac rehabilitation.