Free probate valuation

Assets which were held in the deceased's sole name will be frozen after death, until a grant of probate has been obtained. The word probate means proving, as it involves proving that the will in the executor's possession is the last will of the deceased. Probate is an order of the court officially granting the executor the power to administer the estate. If the deceased did not leave a will, then the court will appoint an administrator, usually the deceased's closest relative. Once a grant of probate (or grant of letters of administration) has been issued, the executor or administrator will be able to sell the deceased's property.

All of the assets and liabilities in the deceased’s estate will need to be valued as at the date of death in order to work out if the estate will be chargeable to inheritance tax, and if so, how much inheritance tax will need to be paid. This includes cash in bank accounts, investments, life policies, personal effects and property. The executors are unable to arrange the affairs of the deceased until probate has been granted.

Commonly valuations are needed for property and personal effects (known as chattels), particularly where the property is going to be sold, rather than passing to a surviving spouse.

Valuations for capital gains tax and inheritance tax purposes can be carried out by the executor/administrators who can provide their opinion of the value of the property. However, lay executors/administrators are usually not experienced enough to give an accurate figure. A qualified chartered surveyor can provide a formal valuation, providing they are accredited by the valuer registration scheme (VRS).

It is always advisable to appoint a qualified chartered surveyor to ensure that the property is not overvalued and unnecessary inheritance tax paid as a result. If the valuation is too low, the district valuer can question the figure which must be defended by the person that provided it. HM Revenue & Customs are more likely to accept a properly drafted and supported valuation provided by a chartered surveyor. In addition, a chartered surveyor will be better equipped to negotiate the value with HM Revenue & Customs should they raise any queries.

It is important to note that the probate value will also become the base cost for calculating any capital gains tax (CGT) should the value of the property increase during the administration period.

Commonly lay executors/administrators do not seek professional advice and try to submit a low value for inheritance tax, to be later stung with capital gains tax, because the property has sold for more than the probate value declared to HM Revenue & Customs.

If you are interested in selling the property, you should ideally appoint an agent before probate is granted. An agent will be able to advise on an appropriate marketing strategy for selling the property and any steps the executor/administrator can do in order to maximise the marketing potential. It is important that marketing advice and probate valuations are co-ordinated if possible.