valuations probate

Probate Valuations: How to Establish an Estate’s Value

‘Probate’ is the term used to describe the legal process for managing a deceased person’s estate, which often includes their property. When someone passes away, you will usually need to get a probate valuation to ensure the correct Inheritance Tax is paid or face potential issues with the HMRC later down the line.

At this difficult and upsetting time, it can be confusing trying to understand what is required and why.  When it comes to probate valuations, we are here to help.

What is a probate?

The process of probate confirms that a will is valid and determines who has the authority to manage the deceased person’s estate.

What are probate valuations and why do you need one?

When someone dies, Inheritance Tax must be paid as a percentage of the estate’s value, and the amount must be accurate to avoid potentially severe consequences down the line.

Probate valuations give a true indication of what a property is worth. Market assessments (often carried out by estate agents) offer something very similar and may even give the same figure but may not be accepted by the HMRC.  In such circumstances, you may need to arrange a probate valuation in accordance with RICS valuation standards, to ascertain if/how much Inheritance Tax is due to the government.

What is the difference between probate value and market value?

A market assessment is an estimate of a property’s worth based on similar sales nearby; normally carried out by an estate agent to advise a prospective client of a marketing / selling price when putting the property to market.

A probate valuation by contrast is a more detailed appraisal of the property asset, undertaken by an RICS Registered Valuer and following the strict valuation standards laid out in the RICS Valuation – Global Standards (the ‘Red Book’) which is accepted by the HMRC and used to calculate Inheritance Tax.

How much does an estate have to be worth to go to probate UK?

Usually, an estate must be worth £10,000+ in order to go to probate.

Who is responsible for the probate valuation of property?

The personal representatives of the deceased are responsible for arranging a probate valuation.

Who can carry out house valuations for probate?

It is important that the probate valuation is accepted by the HMRC.  In simple cases the HMRC may accept an estate agent’s assessment but more often, a valuation in accordance with Red Book standards is required.

Chartered Surveyors who are registered under the RICS Valuer Registration Scheme, such as the team at Trinity Rose, are qualified, trained and experienced in determining probate valuations which can be submitted to the HMRC.

A valuation from a Registered Valuer will carry more weight, especially if the property is unusual, run down or prime for development. This also backs up any claims if they are disputed down the line.

How is probate value calculated?

Probate value is calculated in line with the Inheritance Tax Act 1984 as an open market value on the date of death.

The valuer will draw upon the RICS Valuation – Global Standards and will ensure the property is valued in accordance with the Inheritance Tax Act 1984.

How much does a probate valuation cost?

Some estate agents will carry out a market appraisal for free, but a ‘Red Book’ compliant valuation will require a fee to be paid to the valuer, due to the work involved.

The exact fee will vary from property to property, and our expert team at Trinity Rose will be happy to help and will ask the relevant questions to be able to provide a fixed fee quotation.]

Can you live in a house during probate?

During the process of probate, you may live in the house if you were already doing so when the owner died.

If you want to move in after probate starts, then you will need permission from the executor of the estate to do so.

Can you sell a house before probate is granted?

If all the beneficiaries of the estate agree, the house may be put on the market before probate is completed.

However, you will not actually be able to sell the property until probate has been granted i.e. the personal representative is given legal authority to take control of the estate and assets.

What are the key timelines for estate valuation and HMRC?

When someone dies, you must calculate and pay any Inheritance Tax due. To do this you must value their estate which involves three steps:

  1. Identify the deceased’s assets, savings, debts, loans and mortgages
  2. Estimate the value of their estate
  3. Report the value of the estate to the HMRC

This process can take several months: usually around six months but may be longer.  There are no strict deadlines unless Inheritance Tax is owed.  If it is, payments will need to be made by the end of the sixth month after the date of death.  Payments may begin before the estate is fully valued. You must submit Inheritance Tax forms within a year.

What happens if the house sells for less than the probate value?

If the house sells for less than the probate value, you may be able to claim back overpaid Inheritance Tax. However, this is only possible if the house was sold within four years of the owner’s death.

How to value an estate for probate?

Probate value is determined using the Inheritance Tax Act 1984 as an open market value on the date of death. That is, the value the property would fetch if sold on the day of death.

If you appoint an RICS Registered Valuer to value the property, you will be assured they understand what is expected and accepted by the HMRC to determine any tax payable.   They will consider things such as:

  • Property size
  • Property condition
  • Planning and construction concerns
  • Location
  • The value of similar properties
  • Any environmental concerns

What about valuing personal possessions for probate?

Personal possessions make up part of a person’s estate, and items of significant value, such as cars, jewellery, and artwork, must also be valued for probate.

Make a list of everything you think may be valuable and ask specialists for help when needed so that your figures are accurate. If you find this difficult, companies are available to take care of this for a fee.

Get in touch

We understand that the circumstances around probate discussions can be difficult and upsetting, and also that getting an accurate property valuation is essential. Our team of RICS Chartered Surveyors and Registered Valuers have years of experience in this area and will be happy to offer friendly advice and help at every step.

If you are facing the probate process and need an accurate, professional probate house valuation, please get in touch.