Probate valuation

[harveys45]

after the recent death of my father me and my siblings have asked for a valuation of his house. when we contacted the estate agents we were asked whether we would want a probate evaluation or a normal evaluation. we asked them what the difference was and were not really given an answer. i would appreciate if you could explain the difference. thanks very much, harvey.

[Tim Newbury]

Please read this below I think they are trying to see whether it affects the market value of the house I hope you find this helpful.
Valuations

One of the first responsibilities of the executor is to carry out a valuation of the estate. This is important for two reasons: it will firstly enable the executor to ascertain whether or not there is sufficient value in the estate to cover all of the liabilities and bequests left; and it will secondly ensure that it is known how much (if any) IHT will be payable. It should also be noted that, in most circumstances, the executor will not be permitted to take control of the estate (that is, they will not be given a Grant of Probate) until at least some of the IHT which is owed has been paid. As a result, the valuation of the estate is an essential first step not only for tax reasons, but also for the continuing discharge of the executor's duties.


A valuation of an estate should include any assets that were under the ownership of the deceased at the time of death. This must include property such as houses, as well as the moveable estate; that is, assets such as money, stocks, and possessions such as jewellery. Furthermore, for IHT purposes, you must include certain gifts which were given by the deceased individual within the seven years prior to death. More information on which gifts should be counted is given in articles on inheritance tax elsewhere on this site.

Other factors

As well as these obvious elements of the estate, there are other factors which you must consider. To begin with, many people own a joint share in property; for example, the deceased individual may have bought a house with someone else. In this case, you must include the value of their share of the property. Similarly, you must include any assets in trust to which the deceased was entitled to benefit, along with any assets which they had given away but to which they are still entitled to some benefit. In the latter case, the government gives the example of a house which has been given to the deceased individual's children, but in which he or she lived free of rent.

It is important to note that all of these assets should be valued as if they were being sold on the open market, on the date of death. If you don't know exact figures you can estimate, but you must make use of all relevant information. After you have worked out the total value of the assets, the next step is to total all of the estate's liabilities; they might include outstanding loans and bills, as well as incidentals such as funeral expenses. The final step is to subtract the total liabilities from the total value of the assets. This will give the value of the estate.
Currently, inheritance tax is payable on estates with a value of £285,000 or more, with the threshold rising to £300,000 for the 2007-2008 tax year.