Glossary · UK
What is Probate Value?
The value placed on each asset in a deceased person's estate as at the date of death, used to work out Inheritance Tax due and to obtain the grant of probate needed to administer the estate.
Full Definition
Probate value is the value attributed to each asset in a deceased person's estate -- property, investments, bank accounts, personal possessions, business interests and so on -- as at the exact date of death, rather than at some later date when the asset is actually sold or transferred. Getting probate values right matters for two closely linked reasons: they are added together to determine the total value of the estate for Inheritance Tax purposes, including whether the estate falls within the Nil Rate Band and Residence Nil Rate Band or exceeds them, and the total figure must also be declared to HMRC and, in most cases, to the Probate Registry as part of applying for the grant of probate (or grant of letters of administration where there is no valid will) that gives the personal representative legal authority to deal with the estate. For most everyday assets, such as bank accounts, a simple written valuation or balance statement is normally sufficient, but for higher-value or harder-to-value assets -- most obviously residential and commercial property, but also unlisted shares, valuable jewellery, art, or business interests -- a professional, formal valuation is generally expected, since undervaluing an asset to reduce an apparent Inheritance Tax bill can lead to penalties, and the value used for probate also typically becomes the acquisition cost for Capital Gains Tax purposes if a beneficiary later sells the asset at a profit.