Understanding Property Valuations in the UK for Inheritance Tax

23rd May 2024 | Professional

Playing a crucial role in assessing Inheritance Tax, property valuations are a key determinant in calculating the tax liability. When an individual passes, their estate and properties become the subject of inheritance tax.

It is essential to obtain an up to date and accurate assessment of market value to potentially minimise any liability that may occur. An RICS Registered Valuer can provide the required report to help you and your tax advisors navigate this process.

When providing a property valuation for inheritance tax, the “probate valuation” as it is often referred to, is essential. By taking into consideration the date of death and accounting for any changes within the market since then, a qualified valuation surveyor can assess the property's value at the time of the individual's passing.

Another factor to consider is certain properties may qualify for business property relief or agricultural relief, which can impact the overall tax liability. These reliefs aim to reduce the taxable value of specific assets, such as agricultural land or a business property. It's crucial to meet the eligibility criteria to benefit from these reliefs. It is also essential to obtain good quality advice from suitably qualified tax advisors as well.

Challenges and Considerations

 Property Market Fluctuations – The valuer must consider the dynamic movements of the property market and how values can fluctuate to provide an accurate reflection of the property's value at any given point in time.  

HMRC Guidelines – There are guidelines provided by HM Revenue & Customs (HMRC) which are critical to adhere to. Failure to comply may result in an inaccurate valuation and a challenge by “The Revenue” and potential penalties.

Specialist Valuations – Historic buildings or those with development potential, which may define a property as ‘unique’ may need a specialist valuation. It may require expertise beyond the standard property appraisal.

Valuations for inheritance tax purposes are a critical aspect of estate administration. It is up to beneficiaries and executors to ensure valid and accurate valuations to determine the correct tax liability.

Getting professional advice from qualified property surveyors can help with the complexities of the property valuation and ensuring compliance with the HMRC regulations. We work with accountants and tax advisors to ensure their clients’ interests are covered.

Primmer Olds B.A.S have a team of RICS Registered Valuers that welcome the chance to discuss your needs, whether an advisor, executor or beneficiary.


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