When someone passes away, their estate must be valued for probate, the legal process that confirms a will’s validity and enables the distribution of assets to beneficiaries. As part of this process, executors or administrators are required to report the estate’s value to HMRC for inheritance tax purposes.
Accurate valuation is a critical component of estate administration. Executors are legally responsible for providing a reasonable open-market value for the entire estate as of the date of death, covering assets such as property, investments, fine art, and personal possessions. It is also their duty to maintain proper records to demonstrate due diligence if those figures are later questioned.
Because executors have a duty to take reasonable care, obtaining a professional probate valuation is highly advisable. A properly prepared report helps ensure that the figures are clearly documented and capable of withstanding scrutiny. The aim is to arrive at a fair and defensible figure based on appropriate market knowledge rather than a simple estimate.
Once submitted, HMRC may review the figures, particularly if they appear inconsistent with market levels. HMRC has access to extensive data and market trends, which can help identify discrepancies or potential undervaluation. If it suspects an error, it may open a formal enquiry, usually beginning with a written request for further information. Executors may be asked to provide the valuation report, together with any relevant supporting material available to them, while the valuer may also be asked to explain how the figures were reached.
For executors, a challenge can be stressful, often delaying the probate process and potentially resulting in additional tax becoming payable. In more serious cases, where errors are considered careless or deliberate, HMRC may also impose penalties. This underlines why it is so important for valuations to be properly researched and recorded from the outset.
The choice of valuer is therefore important. It is advisable to instruct valuers who are members of recognised bodies such as the Royal Institution of Chartered Surveyors or the Institute of Registered Valuers, as these organisations require adherence to strict professional standards. Where jewellery is concerned, specialist expertise is equally important. Jewellery valuers should ideally hold a recognised gemmological qualification such as the FGA or a GIA qualification, as this provides added assurance that gemstones, materials and workmanship are being properly identified and assessed
Instructing an independent expert helps executors fulfil their legal duties responsibly while also reducing the risk of disputes among beneficiaries who may have differing expectations of the estate’s value.
