Valuations for Inheritance Tax Purposes

• Valuations for the purposes of Inheritance Tax (in accordance with Section 160 of The Inheritance Tax Act 1984 at Market Values) and otherwise referred to as valuations for Probate, are provided by an RICS registered valuer and comply with their RICS Valuation – Global Standards standards.  The formal document can be given to HMRC as evidence of the value of the items listed, valued as at the date of the deceased’s passing.  The figures quoted will be used in the calculations process involved in ascertaining the amount of tax due on deceased’s estate.

• We appreciate that for many this can be an upsetting and intrusive process at an extremely sensitive and difficult time.  We therefore do our utmost to ensure that great care is taken and that inspections are performed with the least amount of intrusion possible.  No scenario is the same, and our aim is always to attempt to navigate through any issues using clear communication and a sensitive approach.  If you require any further information on the probate valuation process please do contact us.  We will offer free advice from our years of experience, take the time to talk through your queries and concerns and hopefully provide you with the necessary information to move forward.

• Formal valuations are charged at an hourly rate calculated by the time it takes to inspect the items.  A fixed fee can be agreed in advance for single items and we are happy to discuss our fee structure and accommodate your needs if the situation is unusual or deems a different approach be necessary.  Please contact us to obtain a copy of our current fee structure or discuss your situation.

• The personal property (chattels) we are able to value refers to assets that are not permanently attached to land or buildings. They include antiques, fine art, collectables and household and personal goods where they have a re-sale value.  For the purposes of inheritance tax the term ‘Personal Property’ or ‘Chattels’ does not include part interest in land and buildings, plant and equipment.

• For the purposes of probate, the figures quoted are an open Market Value, which is generally calculated at mid-auction estimate, but does not take into consideration commissions or other potential expenses often associated with selling at auction.  In some instances however where this method is not suitable other calculation methods are required using reasonable research and due diligence. The RICS (Royal Institution of Chartered Surveyors) define market value as ‘The estimated amount for which an asset or liability should exchange on the valuation date between a willing seller in an arm’s length transaction after proper marketing and where the parties each acted knowledgeably, prudently and without compulsion’ (RICS, VS3.2, 2012, p.30).  Market Value in accordance with Section 160 of The Inheritance Tax Act 1984 and Section 272 of The Capital gains Tax Act 1992 is defined as: ‘The price which the property might reasonably be expected to fetch if sold in the open market at that time, but that price must not be assumed to be reduced on the grounds that the whole property is to be placed on the open market at one and the same time’ (RICS, UKGN3.2, 2012, p.268).

• The valuation report is principally based upon the valuer’s opinion on the date of the inspection, taking into account the conditions of the examination.   A valuation for probate purposes is not a guarantee of the price payable or receivable in respect of an item.

• The Valuation Report is the copyright of Philippa H Deeley Ltd and will be provided for the stated purposes and for the sole use of the named Client.   It will be confidential to the Client and their professional advisers. The valuer accepts responsibility to the client alone that the report will be prepared with the skill, care and diligence reasonably to be expected of a competent valuer, but accepts no responsibility whatsoever to any person other than the client themself. Any such person relies upon the report at their own risk.

• Neither the whole nor any part of the report or any reference to it may be included in any published document, circular or statement nor published in any way without the valuer’s written approval of the form and context in which it may appear.

• Client details and valuation reports will not be released to any third parties without the client’s express permission except as required by law.

• Values will be ascertained by observing market trends, utilising the valuer’s professional experience, making note of previous sale records, bullion and other relevant prices, and on occasion taking into consideration the opinions of other parties.

• It is the instructing client’s responsibility to disclose all property to be valued, and to ensure that it is included in the valuation report.  It is also the instructing client’s responsibility to disclose any material involvement in the personal property and provide the valuer with a statement of any previous involvement.  The valuer must also be informed by the client of any specific bequests in relation to the estate, which will then be identified and listed separately within the valuation report, and any items previously belonging to the deceased that were gifted within seven years prior to the date of their death.

• Where items are not available for inspection and the valuer therefore relies on photographs and or information supplied by the client, this will be stated in the valuation report.  The valuer shall, unless otherwise expressly agreed, rely upon information provided to them by the client or the client’s legal or other professional advisers. It is the responsibility of the client or the client’s legal or other professional advisers to ensure this information is accurate and advise the valuer if it is not.

• Description detail will vary to be appropriate to the values of the personal property (chattels) being valued.

• HMRC require items such as antiques, jewellery, works of art or collections to be mentioned specifically in the valuation report if they have a value over £1,500, although our reports will mention items or collections of note with values below this figure, with the remaining contents being listed as a combined value, usually on a room buy room basis.

• Even where competent to do so, the valuer will not normally undertake condition reports on personal property (chattels) to establish faults, alterations, or restoration. However, where problems of condition are obvious and affect the value they will be noted in the valuation report.

• Where personal property (chattels) are not new an assumption will be made that items are in reasonable condition, unless specifically stated in the valuation report to the contrary.

• For further information on the processes of Probate and Inheritance Tax we recommend visiting the HMRC website.

• For a copy of our full Terms of Engagement for formal valuations please visit our Terms of Business page.