A probate valuation of a property is a legal requirement that must be fulfilled before winding up an estate. It ought to be a sober reflection of what the property might fetch, without undue pressure on either party.
Tax officials may scrutinize this value to make sure it is credible. A RICS property valuation for probate is more likely to pass muster, because it is an independent, authority opinion. We expand on the factors at play in this post.
Why Probate Valuation of a Property?
In a nut shell it’s what the law says, and the law will have its way. The state must approve a probate valuation of a house, before an executor may pass the asset to an inheritor. However, a tax official must approve the valuation first, and will levy any inheritance tax applicable.
A formal investigation becomes likely if the tax office believes the true value was misrepresented in the submission. An valuation by a member of Royal Institution of Chartered Surveyors (RICS) is far less likely to founder on that basis. Because a RICS probate valuation of a property follows a tried and proven method less likely to trigger an investigation:
Procedure for Probate Valuation of a House
The deceased’s executor – if there is a will – or administrator is responsible for recommending the value of any property in an estate. The UK government does not prescribe how to value a property for probate. Although they do require a professional value of any assets worth more than £1,500, unless:
- The gross value of the estate, before any tax is worth less that £250,000, OR
- The entire estate passes to a spouse or civil partner, allowing an estimated value.
Where the Value of the Estate Is BELOW Threshold
A formal valuation of the property in a deceased estate may be done by a non-professional valuator, provided the gross value of all the assets is less than £250,000. This opens the door to using a para-professional, commonly a local estate agent.
- The estate agent may charge an unregulated fee for the work.
- Those that don’t, may request the right to market the property.
- It may make sense to obtain valuations from several agents.
- If these differ widely, then a RICS surveyor may be indicated.
Where the Value of the Estate Is ABOVE Threshold
An administrator of a deceased estate must provide details of all assets and liabilities (including joint assets) to the UK HMRC tax authority. This requires they value all their property and possessions, before reporting on any inheritance tax due.
More expensive or unusual properties often require a red book RICS house valuation for probate. This may be due to a lack of ready comparables, or recent sales in the vicinity.
The Royal Institution of Chartered Surveyors sets standards detailing how to value a house for probate. A well-formulated report following these guidelines is more likely to pass muster, at the tax office because it touches these bases, and more:
- The valuator should factor in any easements, or covenants affecting the value of the land itself. And also check for planning permissions if the surrounding area is agricultural.
- A leasehold title deed may have considerable impact on a property probate valuation, depending on the number of lease-years remaining.
- The conditions of any rental agreement likewise has a bearing. This may override a deed of sale, and impose rent payable and responsibility for outgoings.
- Whether the property is jointly owned with anyone outside the deceased’s marriage / partnership. Shares are not easy to sell and this affects value.
The RICS valuator will charge a fee for this, and other work. However, this is their only entitlement. Unlike an estate agent, they have no right to sell the property which is in any case not in their line of business.
Avery RICS Probate Valuations of Property
Avery Associates relieves executors and administrators of the burden of locating, and contracting a Royal Institution chartered surveyor. Appoint us to the task, and we will make this happen with minimal intervention from your side.
We are also able to value chattels and loose gear, and clear a home – even a hoarded house – to make it sale- or rental-ready. We have trusted teams on standby in Greater London, and South of England generally. Imagine what else you could do with your time! We can also provide the paperwork for probate and inheritance tax purposes.
Call us on 0800 567 7769 now, or whenever you are ready because we move at your pace. A bungled property valuation could add weeks, even months to winding up an estate. We have a panel of RICS chartered surveyors on standby. We are ready to begin as soon as you can!
