probate valuations

Probate valuations – stocks and shares

Probate valuations – stocks and shares

When executing a will, valuing assets can often be straight forward – until you have to undertake probate valuations for stocks and shares.

Property, belongings and savings valuations can be undertaken by an estate agent, an auctioneer or even the executors themselves.  It is worth remembering however, that expertise is usually required, in order to receive an accurate valuation.  Executors may be held personally liable, if HMRC feels that a valuation is incorrect and launches an investigation.

For this reason, some knowledge of stock and share valuation is preferable.  Don't try and guess a valuation.  Instead, use an experienced advisor or company, who will review the Grant of Probate and original share certificate or statement before giving you a final and accurate valuation of the deceased's specific stocks or shares in any given instance.

If you are looking for a reputable and experienced probate valuer who can do this for you, IWC Ltd will be more than happy to introduce you to a member of our network who can be relied upon to submit an accurate valuation.

Avoiding inheritance tax investigations


With the inheritance tax threshold frozen at £325,000 until at least 2015, more of us are likely to be caught in the HMRC net. It is important therefore, not only to minimise IHT liability but to avoid inheritance tax investigations.

The role of executor is not to be underestimated and it must be remembered that any mistakes could see you being held personally liable. Therefore, in order to ensure that probate is carried out correctly and without any undue delay, it is important that you see the advice of an experienced probate specialist if required.

One of the key tasks as an executor is to have the deceased’s property and assets valued as accurately as possible. This can of course become more difficult, depending on the complexity of the estate, as they may have offshore assets, savings bonds and property abroad.

By using the services of professional valuers for the various aspects of the estate, you will be ensuring that the probate valuations are as accurate as possible, and on paper, are least likely to attract the attention of the HMRC inheritance tax investigation team.

Remember that an inheritance tax investigation can add a substantial delay to the probate proceedings and could see you being held personally and financially liable for any significant errors made.

Probate property valuations challenged by HMRC

It was revealed last week that HMRC has increased its Inheritance Tax (IHT) revenue by 26%, simply by successfully challenging probate property valuations.
 
The current threshold for paying IHT is £325,000. Above this, an estate will be taxed at 40%. This means of course that for valuation purposes, it is better for the beneficiaries if a probate property is valued as low as possible, to try and avoid paying any IHT at all.
 
The recession has struck hard however, and HMRC is now querying many valuations which, it feels, may be inaccurate or misleading.
 
In 2011-2012, HMRC gained an additional £88m in revenue, simply by adjusting submitted probate property valuations. Whilst most valuations are carried out by chartered surveyors or other probate property experts, HMRC has gone on to argue in some cases that various aspects have been overlooked – in particular, the “potential” of a property. All of which of course, will add to its value.
 
In particular, executors should be wary of submitting an exceptionally low valuation in comparison to surrounding properties. If a value stands out, HMRC will check sale prices for neighbouring houses to ensure that it is accurate. If not, executors could be liable to a fine of up to 100% of the additional value. 
 
Should the property be overvalued however, IHT can be claimed back if it is sold for less than the probate valuation price, within four years of the owner’s death.

Organising a probate valuation

If you are the executor of an estate, it is your responsibility to ensure that all the deceased’s assets are accurately valued, in order for inheritance tax to be calculated and applied.
 
Before a Grant of Probate can be issued, you must ensure that you have a house contents valuation for probate if any of the assets contained within are likely to be valued at over £500 individually. An itemised list must be prepared in this instance.
 
Within the valuation, items such as furniture, jewellery, vehicles and antiques, as well as any belongings which were gifted within the last seven years, should be included. The end valuation will give the realistic market price of the goods at the time of death, rather than the insurance valuation figure.
 
Although some lower priced items can be easily valued through a little research, more specialist or valuable pieces may require the assistance of a relevant valuation expert.
 
It is important to ensure that the valuation is as realistic as possible, as over-valuing items for probate can lead to an investigation and possibly a fine by HMRC.

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