How do I value a house for probate purposes?

Full answer

When someone dies owning a property, that property must be included in their estate at its open market value as at the exact date of death — defined as the price the property would reasonably be expected to achieve if sold on the open market at that time, between a willing buyer and willing seller, not the price the deceased originally paid for it, its Council Tax band (which reflects 1991 values in England, entirely unrelated to current market value), or a speculative or optimistic asking price. Getting this valuation right matters for two connected reasons: it determines how much Inheritance Tax (if any) is due on the estate, and it establishes the base cost for Capital Gains Tax purposes if the property is later sold by the beneficiaries for a higher price (the gain is calculated from the probate valuation date, not the original purchase price paid by the deceased many years earlier). For lower-value, straightforward estates where no Inheritance Tax is likely to be due (for example, an estate well within the available nil-rate bands), a single estate agent's market appraisal, or even a considered self-assessment referencing recent comparable sales in the area, may be sufficient supporting evidence for the probate valuation. However, for higher-value estates, especially where Inheritance Tax is due or the estate is close to a relevant threshold, or where the property's value might reasonably be disputed by HMRC or between beneficiaries, HMRC's official guidance strongly recommends obtaining a formal valuation from a RICS (Royal Institution of Chartered Surveyors) qualified valuer, since this carries more weight if HMRC later queries the declared value and requests supporting justification, and provides a more robust position for beneficiaries relying on that figure as their future Capital Gains Tax base cost. If a property is sold relatively soon after death for a different amount than the probate valuation, there are specific relief provisions (relating to sale within a set period of death) that can allow the estate to use the actual sale price instead of the original probate valuation for Inheritance Tax purposes if this reduces the tax due, which is worth checking with a probate solicitor or accountant if a sale occurs unexpectedly soon after obtaining probate. Use the Inheritance Tax calculator, inputting your best property valuation estimate, to gauge the likely Inheritance Tax position.

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