RICS Probate Property Valuation
RICS Red Book Property Valuation – 100% Guaranteed Reports
Probate is a legal term for the management of a deceased estate under government guidelines. This includes valuing any property, and settling any inheritance tax due. This process may be more than meets the inexperienced eye. This is because HMRC wants to know the true value, not a watered-down version. Today we tell you the truth behind RICS property valuations. Are they necessary, do we really need them?
What’s an Acceptable RICS Property Probate Valuation?
Clearly, we need an accurate probate valuation, especially property-wise. This is not necessarily the same as an estate agent opinion. There are two reasons for this namely (a) that is a commercial market opinion, and (b) HMRC may not accept it. By all means give it a punt. However, if HMRC demands a RICS property valuation for probate then you may have wasted precious time.
Truth Behind RICS and Agent Property Valuations
Some estate agent property valuations may prove accurate, while others may not. HMRC will want to know the logic behind them, and the comparables the valuer used. RICS Red Book property valuations for probate are carefully reasoned reports that carry the stamp of independent credibility. There is a difference and HMRC knows it.
There are no standard procedures for estate agents to follow. They may make an honest assessment to the best of their knowledge. However, in the background it would be natural for them to hope to have an opportunity to sell the property.
A RICS house valuation for probate on the other hand works more scientifically. The valuer is a member of The Royal Institution Of Chatered Surveyors. They are obliged to follow guidelines after valuation-specific training. This is our honest assessment on the matter. HMRC expects to see an objective report not an opinion as illustrated within the RICS Valuation technical professional standards and practice information programme.
Who Is Responsible for a True RICS Valuation?
The person who applies for probate, and administers the estate has a duty to provide an accurate probate valuation for a house. They must do so to the best of their ability. Solicitors know this and the majority use RICS qualified property valuers. A lay person may try to take short cuts to save expenses. This may not be the right way to go at a time fraught with emotions.
Who May Investigate and Write the Report
In a word anybody may do so if they are of sound mind. If you have probate, you could do it yourself, or appoint an estate agent or a surveyor. In theory you might even be successful. If you would like to give it try, here’s an insight into the HMRC standard.
HMRC Guidelines for Property Valuations for Probate
HMRC applies a ‘general rule’ that the value of a property (for inheritance tax purposes) is the price it might reasonably be expected to fetch if sold on the open market at the time of death. It explains how to value a house for probate in more detail elsewhere. The authority notes that any costs in making such a sale are not part of that open market value.
The tax collection agency continues by explaining how the applicant may not devalue the asset, if the total value would be less by area compared to the market value of a smaller portion. They cite the example in this regard of a case where the bulk sale of a director’s listed shares could deflate market value.
How RICS Property Valuations Are More Effective
RICS property valuations by registered valuers generally carry more weight. This impact is particularly powerful where a property is unusual, run down, or prime for development. If you decide to bypass this option, may we suggest you base your decision on recommendations by several estate agents / surveyors?
In Summary and Wrapping Up Key Points
The correct way to value a property for probate is in terms of open market value at the time of death. An executor may propose property value in terms of estate agent / surveyor opinions. However, RICS property valuations are far less likely to encounter challenges at the inheritance tax office.
The calculation must be based on open market value upon death, This may be a matter of opinion where several estimates come close. At times like these, it may well be wise to trust the opinion of a professional with a sound reputation in the market place. This in a nut shell is the logic behind RICS property valuations.
Avery Associates Arranges RICS Property Valuations
Avery Associates arranged and manages RICS valuations as part of our overall service helping wind up deceased estates in the South of England. We are efficient, effective and the soul of discretion. Call 0800 567 7769 now if you would like to explore our RICS Probate Property Valuation services further.
