When do you need a ‘Probate’ Valuation?
You need a probate valuation for Inheritance Tax (IHT) purposes. IHT is a tax payable on a person’s estate after they have died; their estate includes money, goods/assets/possessions and property, and these must all be valued in order to assess whether IHT is payable. The valuation must be done whether the estate is being kept by family or sold, and is conducted as at the date of passing (referred to as a Probate Valuation). The current IHT threshold is £325,000 and the standard IHT rate is 40%; if the total is below this figure, IHT is not payable, however, if over this figure, IHT will be payable. As always, to complicate matters, there are certain exemptions, and we would advise that you discuss these with your legal advisor.
A property does not have to be valued by a Registered Valuer (a type of Chartered Surveyors) and can be valued by an estate agent however, it is more likely to be investigated by HMRC if a non-RICS accredited valuation is supplied. A valuation can be disputed by HMRC if they believe that the valuation provided seems too low or inconsistent with other valuations locally. In these situations, a statement is required from the valuer to explain any differences or if the valuation was not conducted by a RICS accredited Valuer a new valuation can be requested. If HMRC find that the value has purposely been adjusted to limit IHT payable a 100% fine of the difference can be made on the executor/beneficiaries.
Payment of IHT must begin by the end of the 6th month after the date that the estate owner has passed and it must be paid before probate is granted and assets can be released; if it’s not paid by then, HMRC will start charging interest. The executors can choose to pay the tax on certain assets, such as property, by instalment over ten years, but the outstanding amount of tax will still get charged interest. Consequently it is in the executor’s interest to ensure an efficient and swift process.
Vickery Holman have a team of experienced RICS accredited surveyors across the southwest who undertake probate valuations and work closely with many legal companies and professionals to offer seamless advice and support during the most difficult of times. We have valued a diverse range of property types for Probate purposes, including trading concerns (care homes, hotels, pubs etc), commercial (retail, office & industrial) investments and owner-occupied properties, residential investments including blocks of flats and HMOs.
If Vickery Holman can assist you in a probate valuation or Asset Valuation for other tax purposes, please contact us directly.
