What is a probate?

A probate is an assessment of the value of any assets owned by the deceased at the time of death, which will include bank accounts, stocks, shares, property, vehicles and items within the property. It will also include any possessions that have been “gifted” within seven years of the deceased’s passing, such as jewellery, paintings or money. The valuation will be representative of a current open market value or what an item would sell for in the second-hand trade.

This value will be crucial to the executor of an estate who will be responsible for settlement of any outstanding debts, determining if inheritance tax needs to be paid and the distribution of the estate to any heirs.

Why do you need a Probate valuation?

Firstly, a probate ensures that all assets are accurately accounted for, which can help prevent disputes among beneficiaries. Additionally, it provides clarity on any inheritance tax liabilities that may arise. In the UK, estates valued above a certain threshold are subject to inheritance tax, making an accurate valuation vital to avoid potential penalties from HM Revenue and Customs (HMRC). Currently, estates that are valued at £325,000 or less are exempt from inheritance tax, whereas anything above this figure will be subject to 40% tax. Furthermore, having a comprehensive Probate valuation can facilitate smoother administration of the estate and ensure compliance with legal requirements. Overall, obtaining a Probate valuation is not just beneficial; it is often necessary for effective estate management.

How do I get a Probate valuation?

The HMRC will carefully scrutinise all valuations, so it is imperative that these figures are accurate. Executors who provide incorrect figures can be subject to penalties and fines.

Certain assets are easier to assign a value to than others; for example, stocks and shares held with a financial institution will be relatively straight forward, or a vehicle which can be appraised based on what similar models in similar condition are selling for through dealers or organisations such as Autotrader.

The appraisal of buildings and properties needs to be conducted by professional estate agents to determine their worth. They will have the necessary experience in the current market climate to provide an accurate estimate.

When it comes to household items such as furniture, ceramics, paintings, jewellery or antiques, enlisting the services of a professional specialist will be imperative. Reputable auction houses, such as Wotton Auction Rooms, will be able to provide a full probate valuation for the contents of a property which will be presented in a standardised format according to HMRC guidelines. These specialists can visit the property to conduct a thorough assessment of all the household chattels. We recommend ensuring that the auction house you appoint is registered with a professional body such as SOFAA or RICS, which will provide additional reassurance.