Do I need a RICS valuation for probate?
Do I need a RICS valuation for probate?
Not always. If the estate is well below the inheritance tax threshold and no tax is payable, many probate solicitors will accept informal estate agent appraisals as a guide to the property’s value. If inheritance tax is or may be payable, you will almost certainly need a formal valuation by a qualified surveyor: properly researched, supported by evidence, and able to stand up to scrutiny by HMRC.
When is inheritance tax payable?
Inheritance tax is charged at 40% on the part of an estate above the available allowances. The main allowance is a nil rate band of £325,000 per person.
When no tax is due: the informal approach
If the estate is clearly below the threshold, for example a modest home and savings well within the allowances, the value of the property does not change the tax bill. In this situation it is common for executors to obtain two or three estate agent letters and use them to settle on a figure. Many probate solicitors are comfortable with this.
Be aware of its limits. An agent’s letter is a marketing appraisal, often written in the hope of winning the sale instruction, and is not a formal valuation. Neither HMRC nor RICS endorses it as a method, but it is still widespread where nothing turns on the figure.
There is a catch. The probate value usually becomes the beneficiaries’ starting point for Capital Gains Tax if they sell the property later. A figure that is too low can mean a bigger CGT bill on sale. A well-supported valuation can be worth having even when no inheritance tax is due.
When tax is payable: a formal valuation is almost certainly required
If the estate is near or above the threshold, the property’s value directly affects the tax owed, and HMRC may check it. The Valuation Office Agency can review property values on behalf of HMRC and challenge figures it considers too low. Executors must take reasonable care, and HMRC can charge penalties where a valuation is careless or unsupported.
A valuation in these circumstances needs to be done to a proper professional standard. That means:
- Research into the property itself: an inspection, its condition, size, tenure, title, and anything that affects its value, such as access, planning restrictions or needed repairs.
- Comparable evidence: analysis of sales of similar properties at or around the date of death, adjusted for the differences.
- Reflection on the market: how market conditions at the valuation date support the figure.
- A clear, reasoned report explaining how the valuation was reached, so it can be defended if HMRC questions it.
A RICS Red Book valuation meets this standard. It is prepared by a RICS Registered Valuer following the Royal Institution of Chartered Surveyors’ global valuation standards, and it is the type of report HMRC, solicitors and the courts expect when tax is at stake.
How Fallows can help
Fallows’ RICS Registered Valuers prepare probate valuations of houses, farms and land across the SOuth of England including East & West Sussex, Surrey, Hampshire, Wiltshire, Southampton and Portsmouth, including retrospective valuations where the date of death was some time ago.
Written by Andrew Thomas MRICS, RICS Registered Valuer, Fallows (Valuation) Surveyors.
This article is general guidance, not tax or legal advice. Executors should take advice on their own circumstances.
