Probate Valuation

Probate Valuation

If a probate valuation is needed, Charles Peck can assist.

Charles is an RICS surveyor and can give a full valuation.

Where we complete a full probate valuation we make a charge of approximately £150+vat (varies with the size of the property).

If you then instruct us to sell the property, we will deduct this cost from your final bill.

Or if you require a simple valuation, there is no charge. Your solicitor can advise whether a full probate valuation is required.

Do call us to discuss the valuation you need. 01243 816666.

You need to value the estate so that you know if there is any inheritance tax to pay.   Depending on the size and nature of the estate you will need to either complete an inheritance tax 205 form, which is relatively short and is sent to the probate registry when applying for probate, or the more lengthily inheritance tax 400 form which has to be sent to HMRC.

It is also important to know the value of a property when someone dies so that you know whether there is any Capital Gains Tax (CGT) due if the property is later sold.

You should be able to value some of the assets of the estate quite easily e.g. money in bank accounts or stocks and shares.  But for property and contents it is not as straight forward and you may need the help of a professional valuer.

The value is the open market value i.e. the price the asset might reasonably fetch if it was sold on the open market at the date of death.  This represents the realistic selling price of an asset, not the insurance value or replacement value.

How do you value property?

It can be complicated to value a property and it is recommended that you obtain a professional valuation.  This can either be an informal valuation provided by an estate agent or a formal valuation carried out by a qualified valuer such as a surveyor.

Some estate agents carry out informal valuations for free and others will charge a relatively low fee for doing one.  If you are going down the informal valuation route then it is recommended to get several valuations, say three, and take the average value.  An informal valuation is more likely to be used if there is no inheritance tax to pay and if the property is a normal residential property.

If there ls likely to be inheritance tax payable on the estate then you should obtain a formal valuation.  A formal valuation will cost more money than an informal one but it will be more detailed.  You should also obtain a formal valuation if the property is not a straightforward residential property e.g. a farm, business premises or land with development value.  The valuer will also be able to advise on the availability of agricultural property relief (APR) and business property relief (BPR).

The valuation should be an open market value at the date of death and should be made on the basis of the guidance provided in a manual by the Royal Institute of Chartered Surveyors (RICS) entitled the ‘Red Book’.   The valuation should be in accordance with the conditions set out in s160 of the Inheritance Tax Act 1984, ‘the price which the property might reasonably expect to fetch if sold on the open market at that time.’

The executors must provide the valuer with a copy of the deeds so that they can check the ownership and extent of the property.  The valuer should take into account any covenants or easements that may affect the value of the land and also check the planning permission if they think that there could be an agricultural tie.  If the property is leasehold they should check the number of years left on the lease as this can affect the value.  If the property is let they should obtain a copy of the lease to see the terms of the lease, the commencement and expiry dates, the rent payable and who is responsible for outgoings.

You can discount the value of a property if it is jointly owned by the deceased and others in order to reflect the difficulty in selling a share of the property when others have a share in it.  However this is not available if the deceased owned the property jointly with a spouse or civil partner.

If tax is likely to be payable then HMRC will employ the district valuer at the local valuation office to value the property on their behalf.  If the district valuer does not agree with the valuation submitted then it will be necessary for them and the person who carried out the valuation on behalf of the estate to negotiate and agree on a value for probate purposes.

Whether the valuation is formal or not it is important to be able to justify the value submitted to HMRC and they can raise a penalty if they consider that the executors have been negligent.  If there is any indication before applying for the grant that the valuation is too low then you should obtain a new valuation.

The .gov website offers a great deal of assistance under  What to do when someone dies.