So, do you need an official house valuation for probate? Yes, you do need an official house valuation for probate. The housing market changes all the time, so it’s important to get a new, up-to-date house valuation from a professional that provides an accurate worth of the property.
We understand that dealing with probate may be daunting and overwhelming after you’ve lost a loved one. To help break down this process, our experts have written a short guide to help you understand this process better, and guide you through the different stages of obtaining a probate valuation.
Read on to learn more.
Why do I need an official house valuation for probate?
When a person dies, you will need to register for probate. This means that you will be granted the legal right to deal with someone’s property and estate. However, before you apply, there are some details that you need to know. This includes:
- Details about the person’s assets or debts. You can source this by contacting banks and similar organisations that the person was registered with.
- An estimate for the worth of their estate. This includes any properties, and forms part of a legal application to determine if you will be taxed on inheritance.
The estimated worth of properties, such as their home or other buildings or land, will become part of a report that calculates how much inheritance tax you may have to pay. It’s important that this worth is accurate, as if the person who has died has a widow, or were planning on giving away their home to their children once they passed, the tax due to pay may be higher.
To avoid any miscalculations and to protect you against any investigations during this difficult time, a probate valuation conducted by a trained surveyor will help to reduce the risk of any serious issues.
Who organises the valuation for probate?
Legally, the person who is named as the executor of the deceased person’s will is responsible for calculating the total of all assets. There may be more than one person who are the deceased’s ‘personal representatives’, or there may be none. In the case where no representatives are named, or in instances where a will has not been made, an administrator will be appointed.
Who can carry out the valuation?
Property valuation is a complex process that requires training and in-depth knowledge of the current property market. For this reason, only a Chartered Surveyor should conduct a probate valuation.
In fact, HMRC’s official guidance states that professional valuation reports will be required unless the estate is worth less than £325,000, or the entire estate and assets are being passed to a spouse or civil partner. In this instance, an informal valuation from a professional body may be considered.
For properties worth more than £325,000, only a formal valuation will be considered. Depending on the size and purpose of the property, a Red Book valuation may also be required for an additional fee. Red Book valuations can only be conducted by a surveyor who is a member of the Royal Institution of Chartered Surveyors (RICS). They are usually used in the instances of pricing up properties such as farms, businesses or large amounts of land.
Do I need a Red Book Valuation for probate?
A Red Book Valuation provides higher standards than that of a Probate Valuation, and it’s for this reason that they’re favoured in high value property cases. They address and solve complex issues, and provide a more in-depth report to an estate’s worth than a standard valuation would. For this reason, they’re highly recommended for estates worth more than £325,000 to ensure that loved ones don’t pay more inheritance tax than they need to.
As it stands, one in four inheritance tax cases get investigated by HMRC. Paying for a Red Book Valuation will save you time and money if you are investigated, and reduce any unnecessary stress during this difficult time.
What will happen to the property?
Once you’ve obtained your probate value for the property, you’ll be provided with a clear indication of how much the property is worth in the current market. What happens to the property next depends on a variety of factors, such as if you’re inheriting the property, or if you’re wishing to sell the property.
Selling the property for more than the probate value
It’s important to consider that you may be taxed more if the property was sold for more than the probate value amount. Not only this, but you may be liable to be taxed for Capital Gains too. Using a professional Surveyor will help to minimise this risk, as your valuation will be in line with current market prices.
Selling the property for less than the probate value
So, if you get charged more tax if the property sold for more than the probation valuation, does this mean you will get charged less tax if the property sold lower than its worth? The answer is yes.
If the property sold for less than the appraised value, then you may be entitled to a tax refund for overpayments. Before you apply for a refund, it’s important that you first contact a solicitor to validate your claim and ensure that all laws for this process are followed.
What you need to know about inheritance tax
The executor of the will, or persons responsible for the estate, will be in charge of paying inheritance tax. Every estate has a tax free allowance of £325,000 including assets, meaning that you are only charged with inheritance tax on any amount that goes above this figure. The current rate of inheritance tax stands at 40%.
For example, if the deceased person’s estate is worth £500,000, and £325,000 of that is tax free, then inheritance tax will only be charged on £175,000.
Why should I choose Crest Surveyors for my probate valuation?
We understand that the probate process can be complex, difficult and overwhelming during a time of mourning. Our team is here to help make this process easier, and reduce stress to ensure that all properties are dealt with smoothly after a loved one has passed.
Our team are all RICS Registered Surveyors, and we offer a full probate valuation, and Red Book Valuation. We’ll work closely with you to guide you through all formalities and stages during this time.
This includes our cost effective pricing system, that means we guarantee a fair market price for all services. Our prices start from £450, including VAT.
Get in contact with one of our team members to receive a quote on any valuations needed for probate related enquiries.
What is a house valuation?
A house valuation is a type of survey conducted by a trained appraiser who values up a property in line with the current housing market.
What does probate mean?
Probate is the term used to describe the legal processes that deal with the deceased person’s estate. This includes any properties, possessions and savings.