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When valuing a deceased person's estate you must include property, possessions and money they owned at the time of their death, as well as certain gifts they may have made up to seven years before they died. Your valuation must reflect the current market value at the time of death.
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Valuing the estate of someone who has died is one of the first things to do if you're acting as the executor or personal representative for that estate.
You normally can't get access to the assets in the estate until you've received a grant of probate (or confirmation in Scotland).
You need to know the estate's worth to fill in the probate application forms and show whether or not Inheritance Tax is due.
Assets are anything that has a value, such as:
You must also evaluate the following to see if they are exempt (and if they aren't exempt, you should include them in your valuation):
You'll need to find out how the deceased person owned any property or assets to work out the value of their share.
All land or buildings that the deceased person owned are part of the estate for Inheritance Tax. If they had been living rent-free in a house that had been left in trust to someone else you'll also need to include this in your valuation of the estate.
If the deceased had shares or other investments that were listed on a recognised stock exchange or they held shares in a private company, you'll need to use their value on the day the deceased person died.
If the deceased person's estate includes a trust, you'll have to follow special rules for valuing it.
Debts and liabilities are outstanding bills and anything else the deceased owed at the time of death. Examples include:
Find out the market value (a realistic selling price) of all of the assets at the time of death. This may be lower than the insurance value.
To value some assets you may need to make more detailed enquiries. HM Revenue & Customs (HMRC) strongly recommend that you use a professional valuer for valuing land and buildings, because the valuing of land and buildings can be a complicated area. You'll have to pay their fees, but you may be able to claim these back from the estate later.
You don't have to get a professional valuation for ordinary household or personal items if either of the following applies:
This includes items such as furniture, pictures, paintings, china, TV, audio and video equipment, cameras, jewellery, cars, caravans, boats, antiques and stamp collections.
Remember to include any gifts (money, property or assets) that the deceased gave away that weren't exempt. If you don't know the exact value of any item and the value of the estate is likely to be less than £200,000 you can use an estimated figure but be as accurate as possible.
Add this all together to get the total value of the assets and gifts.
Deduct from the total market value of the assets anything that the deceased or the estate owed.
The value of all of the assets minus all of the debts is the value of the estate. It's a good idea to make a list of all the assets and debts. Keep a record of paperwork you used to obtain valuations, as well as invoices or receipts for expenses. You'll need these to fill in the Inheritance Tax and probate forms.
You need different forms depending on where the deceased lived and whether Inheritance Tax is due.
If the affairs of the estate are complicated, you may want to work with a solicitor to help you value the estate and pay the tax. You'll find some links below to professional organisations - although not all professionals are registered with them.