Probate Valuation Of Household Goods And Effects And Personal Belongings
In December 2004 HM Revenue and Customs stated that it was anxious to establish whether the value of personal and household assets had been ascertained in accordance with the correct statutory principles i.e. the price the assets might reasonably be expected to fetch if sold on the open market
It is now crucial to instruct professional valuers for the open market valuation of household assets and property when submitting values for probate and IHT. An estate agents valuation of the house, or an inaccurate valuation of the household goods and personal belongings by a house clearance company or non professional will not be adequate and executors will leave themselves wide open for IRS enquiries and penalties
HM Revenue and Customs set out circumstances which might lead them to make further enquiries as to value and warned that it might also want to ask what steps the accountable people took to ensure that all of the goods had been accounted for
HM Revenue and Customs have stated that they may ask for evidence of the instructions given to valuers about the steps taken by accountable people to satisfy themselves that the valuation is on the statutory basis, for photographs and further details of specific items, to inspect and photograph items which have not been sold
If HM Revenue and Customs considers that accountable people or their valuers have been negligent it will consider imposing penalties
The circumstances that currently because HM Revenue and Customs concern are:
Where it is unclear on what basis of valuation has been made valuations should not state that they are made for probate purposes instead the valuation should state that it represents the open market value
Where the accountable person has made an estimated valuation themselves an explanation will have to be provided as to the basis on which the valuation has been made it should also include details of what comparisons have been made
Whether goods have been described as having no value it will be necessary to provide a full explanation of the circumstances and the basis on which that conclusion has been reached
Where insufficient details of a motor vehicle are given it is necessary to provide details of the make exact model year of registration and registration number
Where a valuer has provided a range of values and the accountable person has included values from the bottom of the range hm revenue and customs works on the basis that the most likely price goods would fetch on the open market would be near the middle of the range
Where goods are jointly owned by non-spouses HM Revenue and Customs will want to know the facts establishing the joint ownership
where there has been a sale at an undervalue or a forced sale HM Revenue and Customs expects the value to be adjusted to represent the open market value or a reasonable explanation given as to why the sale value should be taken as such
Where do you stay includes property situated abroad and there was no mention of household and personal goods there are separate valuation of the good should be provided or the valuation of the property should make it clear that the contents are included
Avery Associates are professional probate valuers of property and household assets, and all reports are carried out by qualified RICS surveyors and to date we have a 100% record with Inland Revenue
For an accurate open market valuation for probate contact our main switchboard on 0208 640 0044
Author – Jeffrey Avery
