In this section:
- How to value the estate of someone who has died - the basics
- How to value gifts for Inheritance Tax
- How to value joint property or assets for Inheritance Tax
- How to value the debts and liabilities of someone who has died
- How to value land and buildings for Inheritance Tax
- How to value stocks and shares for Inheritance Tax
How to value joint property or assets for Inheritance Tax
If the deceased owned assets or property jointly with other people, you need to work out the value of their share. You usually work out the value based on the proportion they owned. But sometimes different rules apply.
On this page:
- Ways of owning property and assets
- Valuing shares in a house or land that's owned jointly
- Valuing other jointly owned assets
Ways of owning property and assets
There are different legal ways that the deceased person could have owned property or assets:
- as a sole tenant - they owned them 100 per cent
- as joint tenants - they owned them jointly and equally with one or more people and the deceased's share passes automatically to the other joint owners
- as tenants in common - they owned assets or property with one or more people but each share doesn't have to be equal and each tenant can give away their share however they want to
In Scotland, it's slightly different. Joint tenants are called 'joint owners' and tenants in common are called 'common owners'. Jointly and commonly owned property and assets in Scotland are not usually passed on automatically. They're passed on under a will or, if there isn't a will, through a strict next-of-kin order of priority defined in the 'rules of intestacy'.
In Northern Ireland the terms are the same as for England and Wales but a tenant in common can also be called a 'coparcener'.
Find out more about what to do if there's no will (Opens new window)
Valuing shares in a house or land that's owned jointly
The value of a share of a house or land that's owned jointly depends on:
- the size of the share that the person holds
- who the other owner is
When you value a share of a house or land that's jointly owned, you need to find out the market value of the whole property. Then you can work out the value of each share based on the proportion of the property the person owned.
If the joint owner is a spouse or civil partner
If the deceased person jointly owned a house or land with a spouse or civil partner, you should use the value of the deceased person's share in your valuation. You can't reduce the value of their share to reflect any difficulties in selling joint property.
If the joint owner isn't the deceased person's spouse or civil partner
If the property is jointly owned with someone who isn't the deceased person's spouse or civil partner, you can reduce the value of the deceased person's share. As a starting point, you can reduce the value of the share by 10 per cent.
This reduction reflects:
- the difficulty in selling a jointly owned share of a property
- the fact that the value of a joint owner's share may be reduced because the other owner has the right to keep living in the property
For example two sisters, Jean and Muriel, live together in a house that they own jointly in Wales. The house is worth £500,000 when Jean dies. Jean's share is valued at £225,000 (half of £500,000 less 10%).
The rules are different in Scotland because a joint owner has the right to force a sale and divide the joint assets or property after another joint owner dies. As a starting point you should take off £4,000 from the value of the whole property before you work out the value of the deceased person's share rather than reducing the value of the share by 10 per cent.
Remember, the reductions you apply are only starting points and may have to be changed later on by, or agreed with, the valuation office.
Valuing land and buildings for Inheritance Tax
Valuing other jointly owned assets
Joint bank or building society accounts
The deceased person may have provided all the money in a bank account and the account may be in joint names just for convenience. In that case, you need to include in your valuation all the money that was in the account on the date the person died.
If another person had provided some of the money in the account, you need only include the amount that the deceased person provided.
Joint insurance policies
With jointly owned insurance policies you need only include the deceased person's share, even if the policy is a 'joint life and survivor' policy. The deceased person's share is half the value of the policy.
The insurance company should be able to estimate the value of the whole policy at the date of death. So you can use that to work out the value of the deceased person's share.
Other assets
If the deceased person owned any other assets jointly, you'll need to:
- work out the proportion of the asset they owned
- include the value of their share in your valuation of the estate
