What you Need to Know
As part of our comprehensive valuation services, we can provide probate valuations across Suffolk and Cambridgeshire and further afield.
For Grant of Probate to be issued, executor(s) of the will (person(s) named in the will tasked with organising the estate) or administrator(s) of the estate must submit to HMRC details of all assets and liabilities (including joint assets) and any gifts that may have been made by the deceased in the seven years prior to the date of death. The latter can be obtained by analysis of bank statements for the last seven years. Executor(s) can incur financial penalty if they fail to fulfil their responsibilities.
Property held within the estate is often the most valuable asset. It pays to get the right valuation to minimise Inheritance Tax (IHT) or Capital Gains Tax (GCT) liabilities if the property is sold at a later date. Currently the IHT nil-rate threshold available to everybody is £325,000. Anything above this level is subject to tax at 40% (36% if 10% of the estate value is given to a qualifying charity), however various exemptions and reliefs may be applicable and appropriate advice should be sought. Tax will need to be paid no later than six months after the person died. The necessary IHT forms for filing with HMRC.
The value of assets in a bank account or stocks and shares can be easily calculated however property and its contents less so, but professional help by an estate agent and valuer can help to lessen the burden following the loss of a family member or friend.
We appreciate that selling a property can be difficult in such circumstances and at times stressful when emotions can run high and disputes may occur, especially if there are multiple beneficiaries. It is recommended consultation with a credible estate agent, solicitor and tax accountant is sought. We have local contacts who are specialists in all aspects of probate and tax while we can provide a written bespoke report to determine a fair and accurate open market valuation (OMV for short) that you will need to begin filing with HMRC, following an inspection of the repair and condition of the property or land, marketing advice should you wish to utilise our full-service agency to sell or to let any or all of the land and property. If instructed to sell or let the property or land, we may waive our fee for carrying out our probate valuation services.
Alternatively, it might be that one or more of the beneficiaries decide to retain the property or land. We can assist in mediating and negotiating fair value should beneficiaries wish to buy-out another’s shares while providing marketing advice for sale or to let.
If a property or land is sold for less than the probate value, any IHT overpayments could result in HMRC refunding you. Conversely, HMRC could increase the amount of IHT owed should the property sell for more than the initial valuation and the date of sale may also have bearing on HMRC’s view, if for example the property or land is sold soon after death for significantly more than the valuation received, HMRC may insist on using the actual value it sold for. However, the decision by the District Valuer can be challenged by way of negotiation. Also CGT could be payable if the property or land sells for more than the probate valuation over time.
We have provided useful Q&As below for probate valuations and for all other estate and probate matters we suggest downloading the guide Dealing with an Estate by AGE UK and additionally the UK Government has provided a step by step guide of the various tasks required for valuing the estate of the deceased here.
Yes and no. The property or land can be marketed for sale and offers accepted but ultimately the contracts cannot be exchanged and therefore, the property or land technically sold, prior to the Grant of Probate. However, in some instances the sale of property of land can occur prior such as if the property of land is jointly owned by a surviving spouse who decides to sell.
Executor(s) must provide the valuer with a copy of the deeds so they can check the ownership and extent of the property or land.
This will vary according to the complexity of the estate. For example, approximately six weeks for a simple estate versus twelve to fourteen weeks where the estate exceeds the IHT threshold. In the event HMRC decides to instruct the District Valuer it could take months. We can recommend and advise on local solicitors, accountants and tax specialists to help gain closure as quickly and as smoothly as is possible and to fully realise your needs.
This will vary, it is dependent on the complexity of the estate and number of assets to be valued. If a straightforward valuation, our fee will be deducted from any commission monies should you instruct us to sell or let the property or land. Please contact us for further information.
The actual process of the Property Sale is much the same as a regular property sale, however the grant of probate is required first and contract as to the entire estate administration entitlements and any particular covenants.
While there are various considerations to factor in when valuing property or land (for example any covenants or easements, the unexpired term if a leasehold property, whether the property is currently let etc and especially dependent on the level of complexity such as a farm, business premises, land with development potential), the overarching tenet of valuation should be in accordance with the conditions set out in S160 of the Inheritance Tax Act 1984 defines Open Market Value as: ‘the value at any time of any property shall for the purposes of this Act be the price which the property might reasonably be expected to fetch if sold in the open market at that time’. The realistic value will be ascribed at the date of death.
As part of our valuation services we are happy to keep multiple people informed, during the estate administration although the executor(s) will be the primary point-of-contact.
As part of our service pledge guarantee, all property viewings whether sales or lettings are conducted by your local Whatley Lane expert. Valuable items should be stored safely or removed entirely. Decluttering is essential and large item furnishings are recommend to remain in situ (where applicable). We can advise on any refurbishment works should this be necessary to obtain best possible market value. We also have a register of investor cash buyers to facilitate quick sales if required and in any condition or state of repair. Should you seek an off-market sale or other, please contact us.