After the death of a loved one, going through the probate process is necessary for most cases. For an executor to be able to administer the property of the departed accordingly, they’ll need to acquire a grant of probate or a letter of administration where applicable. Although the probate process might be stressful, going through this probate valuation guide will be of much help.
Estate valuation for probate will be important in determining if the property falls within the tax threshold. These are the properties that qualify to be taxed. If the total assets figure is worth more than £350K, then there shall be a tax obligation to be fulfilled hence the need to go through the probate procedure.
In United Kingdom, probate takes between 9-12 months. This duration is not standard as there are several factors that can influence the probate process. Some of the factors include the following:
- The simplicity of reviewing the estate. Larger or more complicated estates take a longer period.
- Whether there’s a will or not. With a will, the duration will be shorter since no time will be wasted gathering information.
- Conflict among the beneficiaries. If any disagreements may arise, this might result in court proceedings and in return a longer probate period.
- Duration of estate valuation for probate. This is one of the important reasons why you need an efficient and reliable valuer. The longer it takes for your property to be valued, the longer the process will be.
From these circumstances discussed above, we can see that probate can take anywhere between months to a couple of years. It’s also important to note that accurate probate valuation also plays an important role in determining the probate duration.
As part of the process, you’ll have to make sure that there’s accuracy in the probate property valuation for tax purposes. Your probate report needs to be accurate and factual before submitting it to the registry of probate.
As much as you aren’t required to give a valuations report immediately after the death of a loved one, there are time limits to be considered:
- If the estate falls within the inheritance tax band, then the forms for probate need to be completed and returned to the HMRC within one year for inheritance tax purposes.
- However, the time limit for paying the inheritance tax is within six months after the demise of a loved one. The payment can be made even before the final valuation is done.
Whoever you choose to value your property also matters. Will you go for an estate agent or a RICS qualified surveyor? The latter is recommended because their valuation is professional and precise compared to what’s given by an agent.
Agents can give you free valuation or the market appraisal of the estate, but this might get you in trouble with the HMRC. This is because most of the estate agents tend to inflate the prices by giving you the asking price instead of the open market value.
How do you value possession for probate?
In order for the hm revenue and customs to determine the correct inheritance tax to be paid, the probate valuation done needs to be accurate. Once you hire a probate valuer, they’ll need to value the entire estate based on the open market value. This will include all the property, personal possessions, goods, and chattels of the deceased.
Whether you’re in Clapham, Finchley or Richmond, you still get professional valuation services. The chartered surveyors are RICS qualified hence the assurance of getting an accurate valuation of your house contents.
After visiting and valuing the contents of your property, you shall get a full report 72 hours after the visit from the valuer.
Depending on whether you’ll be in need of the specialist package or the standard package, the charges will vary. For the standard package, the price starts from £300 +VAT. The prices for the specialist package are available upon request.
With the specialist probate valuation services, you don’t need to worry about probate valuation of your valuable possessions. Be it jewellry, precious metals, fine art, antiques, rare books vehicles, and valuable gems among other things, you get an expert valuer to make sure everything is correctly valued.
Once this figure is gotten, you can now add it to the total value of the rest of the property. With precise figures, you won’t be having any trouble with the HMRC.
Probate value vs market value:
During probate valuation, situations may arise where a property is either overvalued or undervalued. Undervaluing property in order to evade any tax obligations can be seen as a fraud, which is a serious offence.
Although some disparities may occur between the probate value and the market value, the most important thing is to ensure that the probate property valuation figure is precise for inheritance tax purposes.
What happens if a house sells more than probate value?
If a house is sold more than the amount it was valued for, the HMRC might try to increase the tax owed. This can happen when the sale is made, and it’s usually after probate is granted. Remember, it’s only after being granted probate that an executor/administrator can distribute the deceased’s estate accordingly or do anything with it like selling, perhaps.
If there’s such an increase in the tax owed it can be negotiated with the district valuer. However, these negotiations can be stressful and time-consuming.
What happens if a house sells less than probate value?
In cases where you might have overvalued the house during a valuation, and it’s sold for less, then you can always seek a refund from the HMRC. This would be for the tax overpayment made.
But before making any refund claims, it’s advisable to consult with your solicitor first. It’s also crucial to note that the tax refund claims can be made if the property was sold within four years of a loved one’s demise.
With this simple guide on probate valuation, going about your London probate valuation process should be a lot simpler. With our valuation services, you get an independent, professional, qualified, and experienced valuer to appraise your house contents, chattels, and personal possessions for probate purposes.
Whether you have valuable house contents, you still get quality and efficient professional services when it comes to valuation for probate. Feel free to reach out should you wish to get more information on our probate valuation services or any advice or enquiries regarding house valuations.