For probate purposes, open market value is the price an asset would reasonably achieve if sold on the open market on the date of the deceased’s death. This definition is set out in Section 160 of the Inheritance Tax Act 1984 and applies to all assets forming part of a deceased estate, from property to personal possessions. The sections below address the most common questions executors and solicitors ask when navigating this process.
What does ‘open market value’ actually mean under Section 160?
Open market value under Section 160 of the Inheritance Tax Act 1984 is the price an asset would fetch if sold between a willing buyer and a willing seller in the open market on the date of death. Neither party is assumed to be under pressure to buy or sell, and the buyer is assumed to have access to all relevant information about the asset.
This definition is deliberately precise. It does not mean the highest possible price, the insurance replacement value, or what a family member believes the asset is worth. It means the realistic, arm’s-length transaction price that an informed buyer would pay on that specific date. The date of death is fixed, which means fluctuations in the market after that date are irrelevant to the valuation figure submitted to HMRC.
For executors and solicitors, this distinction matters enormously. Submitting a figure based on sentimental value, an informal estate agent opinion, or an outdated guide price exposes the estate to challenge. HMRC assesses the figure against what the open market would genuinely have supported at the date of death, which is why professional, evidence-based valuations are essential.
How does a RICS valuer calculate open market value for an estate?
A RICS valuer calculates open market value by analysing comparable market evidence from the date of death, assessing the physical condition and characteristics of the asset, and applying professional judgement in accordance with the RICS Valuation Global Standards, commonly known as the Red Book. The resulting figure is an independent, defensible assessment grounded in objective evidence.
For property, this involves reviewing comparable sales of similar properties in the same area around the date of death, inspecting the property in person, and accounting for factors such as condition, size, tenure, planning history, and any legal restrictions. The valuer does not simply rely on Zoopla estimates or estate agent appraisals, which are often aspirational rather than evidence-based.
For chattels, antiques, and personal possessions, the approach draws on auction records, specialist trade data, and the valuer’s expertise in the relevant category. A RICS-accredited probate contents valuer will assess each item individually, applying the same open market principle: what would this item realistically sell for on the date of death, between an informed buyer and a willing seller?
Every valuation must be documented in a formal written report that sets out the methodology, the evidence relied upon, and the concluded figure. This is the standard HMRC expects and the standard that RICS probate valuation services are built to meet.
What assets must be valued at open market value for probate?
All assets forming part of a deceased estate must be valued at open market value for probate purposes. This includes residential and commercial property, household contents, jewellery, vehicles, antiques, artwork, collectables, savings, investments, and any business interests. The obligation applies regardless of whether the estate is liable for Inheritance Tax.
In practice, the assets that most commonly require a formal professional valuation are:
- Residential and commercial property, which requires an RICS Red Book valuation to satisfy HMRC
- Household contents and personal possessions, particularly where items may carry significant value
- Jewellery, watches, and precious metals, which require specialist assessment
- Antiques, fine art, and collectables, where open market value can differ substantially from insurance value
- Vehicles, including classic or specialist cars that require expert appraisal
- Business interests and shareholdings in private companies, which require specialist valuation methodology
Executors sometimes underestimate the value of household contents, assuming modest domestic items carry little weight. In practice, a thorough probate contents valuation can uncover items of significant value that, if omitted or undervalued, could lead to an HMRC enquiry.
Why does HMRC scrutinise probate valuations so closely?
HMRC scrutinises probate valuations because Inheritance Tax liability is calculated directly from the values declared on the IHT400 form. Undervaluing assets, whether deliberately or through lack of professional rigour, reduces the tax payable on an estate. HMRC has both the authority and the incentive to challenge figures that appear inconsistent with open market evidence.
In recent years, HMRC has increased its focus on estates where valuations have not been prepared by a qualified professional. Informal assessments, estate agent opinions provided without formal instruction, and valuations prepared without reference to comparable market evidence are all vulnerable to challenge. Where HMRC disagrees with a declared value, it can issue an amended assessment, impose interest on underpaid tax, and, in cases of negligence or deliberate undervaluation, apply financial penalties.
For solicitors managing estate administration, this creates a clear professional obligation. Relying on anything other than a formal RICS-accredited valuation introduces risk for the estate, the beneficiaries, and potentially the solicitor’s own position. The standard HMRC expects is an independent, evidence-based report from a qualified valuer who can demonstrate compliance with Section 160 of the Inheritance Tax Act 1984.
What’s the difference between probate value and market value?
Probate value and market value refer to the same underlying concept, which is the open market value of an asset, but probate value is fixed at the date of death. Current market value reflects what an asset would sell for today. If property prices have risen since the date of death, the current market value will be higher than the probate value, and the two figures should not be conflated.
This distinction has practical consequences for estates. The probate value is used to calculate the Inheritance Tax liability and must reflect conditions at the date of death. If a property is subsequently sold for more than the probate value, Capital Gains Tax may apply to the difference between the probate figure and the sale price. Accurate probate valuation therefore matters not only for Inheritance Tax compliance but also for managing the estate’s future tax position.
Insurance replacement value is an entirely separate concept and should never be used as a proxy for open market value. Insurance values are calculated to reflect the cost of replacing an item at retail, which is typically significantly higher than what the same item would achieve if sold on the open market. Submitting insurance values for probate purposes is a common error that can result in an inflated IHT liability or, if the figure is queried, draw unwanted attention to the estate.
When should an executor instruct a RICS valuer for probate?
An executor should instruct a RICS valuer as early as possible in the estate administration process, ideally before the IHT400 form is submitted to HMRC. Obtaining professional valuations at the outset ensures that the figures declared are accurate, defensible, and compliant with Section 160 of the Inheritance Tax Act 1984 from the start, avoiding the need for amendments or revaluations later.
Early instruction is particularly important where the estate includes property, as the probate application cannot proceed until the Grant of Probate is obtained, and the IHT return must be submitted before the Grant is issued. Delays in commissioning a formal valuation can hold up the entire administration process. Instructing a RICS valuer promptly keeps the timeline on track.
There are also circumstances where professional valuation becomes urgent. If HMRC opens an enquiry into a previously submitted valuation, or if a beneficiary disputes the value attributed to a specific asset, a formal RICS report provides the authoritative evidence needed to resolve the matter. In these situations, the quality and credibility of the original valuation report becomes critical.
For complex estates, those involving multiple properties, significant chattels, or high-net-worth assets, early engagement with a specialist probate valuation firm allows the full scope of the estate to be assessed in a coordinated and methodical way, reducing the risk of omissions and ensuring every asset is correctly valued for Inheritance Tax purposes.
How Avery Associates helps with open market value probate valuations
Avery Associates provides RICS-accredited probate valuations that satisfy HMRC’s requirements for open market value assessments under Section 160 of the Inheritance Tax Act 1984. With a 100% HMRC acceptance rate and over 20 years of experience supporting solicitors and executors across the UK, the firm offers a complete, reliable service for estates of every size and complexity.
- RICS Red Book Property Valuations prepared by registered valuers, accepted by HMRC without challenge
- Probate contents valuations covering household possessions, antiques, jewellery, art, and collectables
- Reports returned within five working days, with urgent written reports available within 24 hours
- Nationwide coverage through a network of local RICS-accredited valuers across every county in the UK
- Full compliance with Section 160 of the Inheritance Tax Act 1984 on every instruction
- End-to-end estate administration support, including house clearance, document retrieval, and property sale
- Free initial consultation for solicitors and executors
If you need a formal open market value assessment for probate, contact Avery Associates to arrange a free initial consultation with a specialist RICS probate valuer.
Related Articles
- What are the compliance requirements for probate valuations in England?
- What emotional support is available after bereavement in the UK?
- What is a grant of probate and how do you get one?
- How does probate house clearance affect the property sale timeline?
- What documents do you need for a probate house clearance?
This content was generated with the help of AI and it may contain mistakes
