Probate/ Inheritance Tax Valuation

Only those assets over which the Personal Representative acquires control are reported for probate purposes. Since assets owned as a Joint Tenant do not form part of the estate on death they are not included for probate purposes, although they will be included in any Inheritance Tax calculations. Assets owned as Tenants in Common, however, are the responsibility of the Personal Representative and must be reported.

When assets are jointly owned only the deceased's share is included in the valuation for Inheritance Tax purposes. Very often this will amount to an equal share of the asset. If two people owned the asset then the share is 50%, if three people owned it, 33.33% etc. If there is an unequal share this will be stated in the document that created the joint ownership - for instance a previous will if the property was inherited or the Trust Deed for property held as Tenants in Common.

If a property is jointly owned, either as Common Tenants or Tenants in Common, with someone who is not the deceased's spouse or civil partner, then the value can be reduced by 10% to reflect the difficulty of selling the property and the reduced market value when another person has the right to live in it.

Valuation of the estate could be considered to be one the most important functions that a personal representative performs. The proper calculation of an estate's value will determine whether probate is required or whether there is any Inheritance Tax or Capital Gains tax to pay. Application for a Grant cannot go ahead until valuation is complete.

At the time of death, a tax is paid on the assets (investments, property & possessions) that you owe. It is known as Inheritance Tax.

An accurate market value of property is necessary at the date of death for overall estate and individual property in accordance with Inheritance Tax Act 1984. Inheritance Tax is usually paid on an estate when somebody passes away. It's also sometimes payable on trusts or gifts made during someone's lifetime. Most estates don't have to pay Inheritance Tax because they're valued at less than the threshold (£325,000 in 2016/17). The tax is payable at 40 per cent on the amount over this threshold or a lower rate percentage rate if more than 10% of estate is donated to charity.