For probate purposes, a jointly owned property is included in the deceased’s estate based on their share of ownership, either half of the property’s open market value for joint tenants, or the precise percentage held for tenants in common. The type of joint ownership determines both how much is included and what documentation HMRC requires. The questions below address each aspect of this process in detail.
What share of a jointly owned property is included in the estate?
The share included in the deceased’s estate depends entirely on how the property was held. For joint tenants, the deceased’s share is typically 50% of the property’s open market value at the date of death. For tenants in common, the share reflects the exact percentage the deceased owned, which may or may not be equal.
These two forms of co-ownership are legally distinct. Joint tenancy means both owners hold the property together as a single unit, with no defined individual shares. When one owner dies, their interest passes automatically to the surviving owner through the right of survivorship. Despite this automatic transfer, the deceased’s share must still be declared to HMRC for Inheritance Tax purposes.
Tenants in common, by contrast, hold clearly defined shares that can be equal or unequal. A deceased owner may have held 30%, 50%, or any other proportion. That precise share forms part of their estate and must be valued accordingly. The ownership split is usually confirmed by the title deeds or a declaration of trust held at the Land Registry.
How is the value of a jointly owned property calculated for probate?
The value of a jointly owned property for probate is calculated by first establishing the property’s full open market value at the date of death, then applying the deceased’s ownership percentage to arrive at the chargeable share. HMRC requires this figure to reflect what the property would realistically have sold for on the open market on that specific date.
For a standard joint tenancy where two owners hold the property equally, the calculation is straightforward: half the open market value. However, HMRC also recognises that a partial interest in a property, particularly where a co-owner remains in residence, may attract a discount to reflect the practical difficulties of selling that share on the open market. This is sometimes referred to as a co-ownership discount or undivided share discount.
The application of such a discount is not automatic. It requires professional judgement and must be supported by a properly reasoned valuation report. The discount, where applicable, typically reflects the reduced marketability of a partial interest and the legal complexities a prospective buyer would face. This is one reason why an informal or estate agent valuation is rarely sufficient for jointly owned properties in probate.
Does joint tenancy mean no probate valuation is needed?
No. Even though joint tenancy triggers the right of survivorship, meaning the property passes automatically to the surviving owner without going through the will, a probate valuation is still required if the deceased’s estate is liable for Inheritance Tax. The value of the deceased’s share must be declared to HMRC regardless of how ownership transfers.
The right of survivorship simplifies the conveyancing process, but it does not remove the obligation to account for the asset’s value for tax purposes. Executors and solicitors must still report the deceased’s interest at its open market value as at the date of death, and HMRC expects this figure to be supported by a professional valuation rather than an informal estimate.
It is also worth noting that where the estate falls below the Inheritance Tax threshold, a formal valuation may still be needed to confirm that position accurately. Undervaluing an estate, even unintentionally, can result in HMRC enquiries and potential penalties. A professional valuation provides the documented evidence needed to support whatever figure is submitted.
What does HMRC require for jointly owned property valuations?
HMRC requires that jointly owned property is valued at its open market value as at the date of death, in accordance with Section 160 of the Inheritance Tax Act 1984. The valuation must reflect what the property would have fetched in an arm’s length transaction on the open market on that date, taking into account all relevant factors, including the nature of the ownership interest.
Where a co-ownership discount is claimed, HMRC will scrutinise the basis for that discount. A valuation report must set out the reasoning clearly and demonstrate that the figure submitted is defensible. HMRC has become increasingly rigorous in questioning probate valuations that are not prepared by a qualified professional, and reports not supported by an RICS-registered valuer are more likely to be challenged.
The completed valuation feeds directly into the IHT400 (or IHT205 for excepted estates) submitted as part of the probate application. Errors or omissions at this stage can delay the Grant of Probate, trigger a formal HMRC investigation, or result in interest charges on underpaid tax. Solicitors routinely insist on professional valuations precisely to avoid these outcomes.
Who should carry out the valuation of a jointly owned property?
A jointly owned property for probate should be valued by a RICS probate valuation specialist, specifically, a valuer registered with the Royal Institution of Chartered Surveyors and experienced in producing reports that meet HMRC’s requirements. An RICS Red Book Valuation is the accepted standard for probate property valuations in the UK.
Estate agent valuations are not suitable for probate purposes. They are typically marketing estimates rather than formal appraisals, and they carry no professional indemnity backing in the context of a legal submission. HMRC does not treat them as equivalent to an RICS Red Book Valuation, and their use can expose executors and solicitors to challenge.
For jointly owned properties in particular, the valuer must understand both the open market value of the whole property and the specific considerations that apply to a partial interest. This requires professional judgement and a thorough knowledge of the legal and tax framework, not simply a knowledge of local property prices.
How Avery Associates helps with jointly owned property probate valuations
Avery Associates provides RICS Red Book Property Valuations specifically prepared for probate purposes, including jointly owned properties held as joint tenants or tenants in common. Their team of RICS-registered valuers understands the legal nuances that apply to partial interests and produces reports that are fully compliant with Section 160 of the Inheritance Tax Act 1984.
- RICS-accredited valuers with a 100% HMRC acceptance rate
- Reports prepared in accordance with RICS Valuation Global Standards (Red Book)
- Clear, reasoned treatment of co-ownership and any applicable discounts
- Nationwide coverage with dedicated valuers across every county in the UK
- Standard reports returned within five working days; urgent reports within 24 hours
- Trusted by over one hundred law firms across the UK
For solicitors and executors managing an estate that includes jointly owned property, professional valuation support removes uncertainty and protects against HMRC scrutiny. Contact Avery Associates to arrange a free initial consultation.
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