The problem with the law is it sometimes zooms into the details that are oh-so boring. We decided to discuss RICS property valuation for probate in the broader context. That way, we can fit it into the wider picture of dividing an estate fairly after settling inheritance tax. This is a case of ‘soonest started, soonest sorted’.
RICS Property Valuation and Inheritance Tax
The purpose of the exercise is to value an estate, settle amounts owing, and distribute the balance to the heirs. This can take several months, even longer depending on complexity. The trick is to do the right things in the right order, and get them right first time.
Sorting things out in a simple estate should be within reach of the average person if they apply their minds. Many of us, of course, prefer to ‘stick to the knitting’ we do best. This is how a whole industry developed around deceased estates in England. Avery Associates is part of the jigsaw puzzle and we are here to assist..
Step One: Identify the Assets and Liabilities
We can’t begin to consider these matters, until we know whether a RICS house valuation for probate is necessary. We begin by sketching the broader canvas as follows briefly:
- Complete a thorough search to track down all the assets. These may include – but are not limited to – bank accounts, savings, investments, pensions, property, household goods and personal items.
- Identify all debts of the estate, by examining the deceased’s savings and bank accounts. These are typically utility bills, mortgages and money owed on credit cards. We should not forget new debt associated with the funeral, after allowing for any Funeral Expenses Payment.
Step Two: Estimate the Value of the Estate
A provisional assessment of the assets and liabilities provides an estimate of the net value of the estate. However, we should also incorporate the value of any gifts the deceased made during the seven years preceding their death.
A Somewhat Unusual Piece © Avery Associates
A RICS property valuation for probate will be strongly indicated if the provisional value is greater than £325,000. Because that’s the threshold above which inheritance tax is due, and you may need assistance to value a property for probate. As a general rule of thumb, the value of an item is the amount it should sell for on an open market.
Step Three: Help Available to Assist with Valuations
It has become even more important to value deceased estates accurately during these turbulent times. The government is keen to harvest as much income as they can glean from taxation. While at the same time, you can’t afford to cash-in the assets below market value.
RICS Professional Property and Land Valuations
The best, and arguably only way to value property and open land for probate involves paying a reasonable fee for a quantity surveyor. This is to conduct a RICS property valuation for probate.
Avery Associates includes a panel of RICS specialists registered with the Royal Institution of Chartered Surveyors. This organization is in good standing with HMRC and its opinions do count.
Avery Associates’ Bespoke Chattel Valuations
Collectible chattel valuations of loose items is the heart of our business around which our other activities cluster. Our core team includes:
- Our founder Jeffrey Avery with over 35 years’ experience in fine art, furniture, collectibles, and 20th century design generally.
- Our stamp specialist and consultant, Stuart Billington with over 35 years probate valuation experience.
- Alan Darwell, with 45 years’ experience of oils, watercolours and antiquarian prints. He knows the London market particularly well.
- Clifford Lansberry is a fine art and antique consultant, holding membership of Royal Institution of Chartered Surveyors.
Order of British Empire © Avery Associates
These bespoke experts are available to express opinions on deceased estate chattels. They can value them and assist with their sale as the client desires.
First Steps after Property Valuation for Probate
Once you have the value of the assets, and the burden of the debt buttoned up, you are getting closer to distributing the deceased estate. Your next step is to formally submit the financials to HMRC so that:
- You can make arrangements to settle any inheritance tax obligations.
- You can then apply for probate. This is authority to distribute the estate.
Certain estates are exempt from detailed submissions. The rules are complex. Read more about excepted estates here. These are cases where you only need submit a summary, and not a detailed valuation to satisfy the rules.
Distributing the Assets and Closing Out
Once HMRC issues a clearance, you can then go ahead and distribute the assets in one of two ways:
- Where there is A VALID WILL, in accordance with the deceased’s wishes contained therein.
- Where there is NO VALID WILL, in accordance with the rules of intestate succession.
A statement of final account must be prepared, and distributed by the executor to all the beneficiaries. This should include (a) any inheritance tax receipt, as well as (b) proof of all debts paid. They will also need to include (c) proof of any expenses deducted, and finally (d) written receipts from any beneficiaries of the estate. Once this is done, the job is over and the executor can step down.
