HMRC can examine values reported for an estate. That does not mean every professional valuation will be challenged, nor can any valuer promise that a figure will be accepted without questions. The sound approach is to commission a properly defined date-of-death valuation and retain the evidence behind it.
The report should allow its identified users to understand what interest was valued, at what date, for what purpose and on which assumptions. A bare figure or current estate-agent opinion may be harder to explain if the estate later needs to show how the value was reached.
What makes the instruction clear
The terms and report should identify the executor or other client, the relevant property interest, the date of death and the Inheritance Tax or probate purpose. Joint ownership, tenancies, related property and unusual restrictions should be disclosed before analysis.
A later inspection should be identified as such. The report needs to distinguish observed current facts from evidence and assumptions about the property’s historic condition.
Evidence that supports the opinion
Comparable transactions should be relevant to the historic valuation date and analysed for differences. The record may include transaction details, floor areas, tenure, condition and explanations of adjustments. Several verified comparables generally provide a stronger foundation than one nearby headline price.
Photographs, sales particulars, leases, tenancy information and records of works can support the property description. The valuer should retain an adequate file in line with professional requirements.
What if the later sale price differs?
A sale above or below the probate figure does not by itself prove the earlier opinion incorrect. The valuer and tax adviser may need to consider timing, marketing, changes in condition, lease events, improvements and whether the sale was at arm’s length.
Special tax provisions may apply when estate land is sold at a loss within the relevant period. Those rules contain conditions and aggregation effects, so executors should obtain tax advice rather than amending a figure informally.
Responding to questions
The executor should coordinate any response with the estate’s tax adviser and provide the valuation report rather than attempting to reconstruct its reasoning. The original valuer may be asked to clarify evidence or comment on new information within an agreed additional instruction.
The valuer is not the estate’s legal or tax representative. Their role is to provide an independent valuation opinion for the specified interest, purpose and date.
- Keep the signed report and terms of engagement
- Preserve evidence of historic condition and ownership
- Retain comparable schedules and relevant correspondence
- Refer tax-procedure questions to the estate adviser
Advice for your property
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Authoritative sources and further reading
The guide is general information, not property-specific, structural, legal, tax or financial advice. Source pages can change; consult the relevant professional for your circumstances.