By appointing our firm to carry out and prepare this specialist valuation, our one stop service means we can also sell the property should you require this. One of our expert valuers are able to carry out a valuation at a convenient time and are fully aware of the sensitivity of the issue. The figure will ultimately need to be agreed with the District Valuer who will be in contact with our valuers or the lawyers acting on behalf of the estate.
Valuations for probate is legally required by HM Revenue and Customs in order to establish the value of a property as part of a deceased person's estate. The valuation must reflect the current market value at the time of death.
Valuing the estate of someone who has died is one of the first things to do if you're acting as the executor or personal representative for that estate.
You need to know the estate's worth to fill in the probate application forms and show whether or not Inheritance Tax is due. You would normally require the services of a lawyer for this.
What is Inheritance Tax?
Inheritance Tax is usually paid on an estate when somebody dies. It's also sometimes payable on trusts or gifts made during someone's lifetime. The tax is payable at 40% on the amount over this threshold or 36% if the estate qualifies for a reduced rate as a result of a charitable donation.
Increased threshold for married couples and civil partners
Since October 2007, married couples and registered civil partners can effectively increase the threshold on their estate when the second partner dies, to as much as £650,000 in 2013-14. Their executors or personal representatives must transfer the first spouse or civil partner's unused Inheritance Tax threshold or 'nil rate band' to the second spouse or civil partner when they die.
Inheritance Tax thresholds
The Inheritance Tax threshold (or 'nil rate band') is the amount up to which an estate will have no Inheritance Tax to pay.
If the estate - including any assets held in trust and gifts made within seven years of death - is more than the threshold, Inheritance Tax will be due at 40% on the amount over the nil rate band. From 6 April 2012 people who leave 10% or more of their net estate to charity can choose to pay a reduced rate of Inheritance Tax of 36%.
The July 2015 budget introduced an additional nil-rate band that will apply if your home is passed on to a child or grandchild upon your death. This band will be £100,000 in 2017-18, £125,000 in 2018-19, £150,000 in 2019-20 and £175,000 in 2020-21. The new nil-rate band will be gradually withdrawn for estates with a net value of more than £2 million, at a rate of £1 for every £2 over this threshold.
Inheritance Tax exemptions and reliefs
Sometimes, even if your estate is over the threshold, you can pass on assets without having to pay Inheritance Tax. Examples include:
• Spouse or civil partner exemption. Your estate usually doesn't owe Inheritance Tax on anything you leave to a spouse or civil partner who has their permanent home in the UK - nor on gifts you make to them in your lifetime - even if the amount is over the threshold;
•Charity exemption. Any gifts you make to a 'qualifying' charity - during your lifetime or in your will - will be exempt from Inheritance Tax. A donation to charity in your will may also reduce the rate that the tax is paid at;
•Potentially exempt transfers. If you survive for seven years after making a gift to someone, the gift is generally exempt from Inheritance Tax, no matter what the value;
•Annual exemption. You can give up to £3,000 away each year, either as a single gift or as several gifts adding up to that amount. You can also use your unused allowance from the previous year but you use the current year's allowance first;
• Small gift exemption. You can make small gifts of up to £250 to as many individuals as you like tax-free;
• Wedding and civil partnership gifts. Gifts to someone getting married or registering a civil partnership are exempt up to a certain amount;
• Business, Woodland, Heritage and Farm Relief. If the deceased owned a business, farm, woodland or National Heritage property, some relief from Inheritance Tax may be available.