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How to Value an Estate for Probate in the UK (2026 Guide)

· 24 min

Note: The following scenario is fictional and used for illustration.

When Emma's father died unexpectedly at 68, she thought valuing his estate would be straightforward. She used online property estimators for his house, guessed at the value of his furniture and tools, and submitted the IHT205 form based on her calculations showing £310,000—safely below the £325,000 threshold.

Eighteen months later, HMRC's District Valuer challenged the property valuation. The house was actually worth £385,000, not £280,000. The furniture included a restored Ercol dining set worth £4,200, not the £200 she'd estimated. The 'old tools' in his garage included rare carpentry equipment valued at £8,500.

The estate owed £24,000 in inheritance tax. Emma, as executor, faced a £7,200 penalty for careless valuation and was personally liable for the shortfall.

In 2024, caveat applications challenging probate increased 56% over five years to 11,362 cases, often triggered by valuation disputes. Estate valuation errors don't just risk HMRC penalties—they can spark family conflicts that end up in court, costing executors thousands in legal fees and months of stress.

This guide shows you how to value an estate accurately, when you need professional help, and how to protect yourself from HMRC challenges and personal liability.

Table of Contents

What is Estate Valuation for Probate?

Estate valuation for probate means calculating the total monetary value of everything the deceased owned (assets) minus their debts (liabilities) at the exact date of death.

This isn't a rough estimate. HMRC requires market value—the price property would reasonably fetch if sold in the open market at that time. This legal standard comes from the Inheritance Tax Act 1984, which governs how estates are valued for tax purposes.

You need an accurate valuation for three key reasons: to determine if the estate owes inheritance tax, to complete the probate application, and to distribute assets correctly to beneficiaries. The executor named in the will, or the administrator appointed by the court if there's no will, is responsible for this task.

The timeline is strict. You must complete the valuation and submit required forms within 12 months of death. If inheritance tax is due, you must pay it within 6 months to avoid interest charges.

David's estate included a £180,000 house plus £42,000 in savings and an £8,000 car, minus a £15,000 mortgage. That gave a net estate value of £215,000. No inheritance tax was due because the estate fell below the £325,000 threshold, but David's executor still needed to provide an accurate valuation for the probate application.

In 2023, 277,745 grants of probate were issued in England and Wales, up 2.9% from the previous year. HMRC collected £6.70 billion in inheritance tax liabilities in 2022-23, a 12% increase showing more estates are reaching taxable thresholds.

When You Need to Value an Estate (And When You Don't)

All estates need valuation before applying for probate, if probate is required. But the level of detail and documentation varies significantly based on the estate's value and complexity.

Excepted estates qualify for simplified reporting using form IHT205. These are estates valued under £325,000, or estates worth up to £650,000 where the unused spouse allowance is being transferred, or where the entire estate passes to a spouse or registered charity. For these estates, you don't need detailed professional valuations for every asset.

Full details are required using form IHT400 when estate values exceed the thresholds, or when the estate includes complex assets like business interests, trusts, foreign property, or lifetime gifts exceeding £3,000 in the last seven years.

Some estates don't need probate at all. Very small estates under £5,000-£10,000 (depending on the financial institution) may not require a grant of probate. Property owned as joint tenants passes automatically to the surviving owner outside the estate. Assets with nominated beneficiaries, like some pensions and life insurance policies, also pass outside probate.

Margaret's estate provides a clear example. Her £290,000 house was owned as joint tenant with her husband, so it passed to him automatically. The remaining estate comprised £15,000 in savings and £8,000 in personal items. Only the £23,000 needed to be valued, and the simplified IHT205 form applied rather than the detailed IHT400.

According to GOV.UK inheritance tax guidance, over 90% of estates have no inheritance tax liability. This means most families can use simplified reporting. However, intestate estates increased 17% to 51,140 cases in the past year—a five-year high—creating additional complexity for families who must navigate probate without clear guidance from a will.

The 2025 Inheritance Tax Thresholds You Need to Know

The standard nil-rate band is £325,000 for all estates, frozen until April 2031. This is the amount you can leave before inheritance tax applies.

You may also qualify for the residence nil-rate band of £175,000 if you're passing your main residence to direct descendants—children, grandchildren, or step-children. This brings the total tax-free threshold to £500,000 for individuals leaving their home to children.

For married couples and civil partners, these allowances can be combined. When the first spouse dies, their unused allowance transfers to the survivor. This creates a potential combined threshold of £1 million (£325,000 + £325,000 + £175,000 + £175,000) when the surviving spouse leaves everything to descendants.

However, the residence nil-rate band reduces if your estate exceeds £2 million. The allowance tapers down by £1 for every £2 over the threshold. This means estates worth significantly more than £2 million may lose the residence allowance entirely.

Inheritance tax is charged at 40% on the amount above your available threshold. Tax must be paid by the end of the sixth month after death to avoid interest charges.

James died leaving a £480,000 estate including a £350,000 house left to his son. His standard nil-rate band of £325,000 plus the £175,000 residence band gave him a total threshold of £500,000. No inheritance tax was due. Without the residence band, £155,000 would have been taxable at 40%—creating a £62,000 tax bill.

These thresholds remain frozen until 5 April 2031 according to legislation confirmed in the Finance Bill. The £2 million taper threshold also remains fixed. This freeze means inflation will gradually push more estates into taxable territory over the coming years.

Step-by-Step: How to Value Different Assets

Different asset types require different valuation approaches. Here's how to value the most common assets you'll encounter.

Property (Houses, Land, Buildings)

For estates over £325,000 or properties worth over £250,000, HMRC typically expects a professional RICS chartered surveyor valuation. These cost £295-£800 depending on property value and location.

For smaller estates, estate agent valuations are acceptable. Most agents provide free market appraisals. Best practice is to obtain three valuations, use the middle value, and document your rationale.

Joint Property

Property ownership type determines how you value it for probate. Joint tenants own property together—when one dies, their share passes automatically to survivors and isn't part of the deceased's estate.

Tenants in common each own a specific share, often 50% but potentially any proportion. The deceased's share forms part of their estate. Check ownership type with a £3 Land Registry search.

When valuing a tenant in common share, you can apply a 10-15% discount. This reflects the practical difficulty of selling a partial property interest to a third party.

Bank Accounts and Savings

Request the exact balance at the date of death from each financial institution. Include interest accrued up to that date. Check whether any automatic account closures or insurance payouts apply that might affect the estate value.

Investments (Stocks, Shares, ISAs)

Use the closing price on the date of death from the London Stock Exchange. The quarter-up rule applies: average the highest and lowest quoted prices that day.

Most investment platforms provide probate valuations on request, which simplifies this process significantly.

Vehicles

Use trade values from Glass's Guide, CAP, or Parkers—not insurance or retail values. HMRC accepts self-valuations for ordinary vehicles without requiring professional appraisals.

Personal Possessions

Items under £500 can be estimated reasonably without professional valuations. Items over £500—jewelry, art, antiques, collections—require professional valuation.

HMRC guidance states that if total household contents are worth under £1,500, estimates are acceptable without detailed itemization.

Susan's jewelry illustrates this clearly. Her wedding ring (valued at £450) could be self-estimated. Her vintage Cartier watch (worth £6,200) needed a professional valuer, which cost £85. Her costume jewelry (£120 total) could be self-estimated.

Pensions and Life Insurance

Most pass outside the estate to nominated beneficiaries. Include them only if there's no nomination or they're paid directly to the estate. The provider will issue a valuation statement.

Business Interests

Professional business valuations are required. You may qualify for business property relief, which reduces the taxable value by 50% or 100% depending on the business type.

Gifts in the Last 7 Years

Review bank statements for the seven years before death. List all gifts exceeding the £3,000 annual exemption. Taper relief applies to gifts made 3-7 years before death, potentially reducing the tax due.

Property Valuations: When You Need a Chartered Surveyor

Property typically represents the largest asset in most estates, making accurate valuation critical.

RICS chartered surveyors are required for estates over £325,000 or properties worth over £250,000. Costs range from £295-£800 depending on property value and location, with the average around £367.

Why does HMRC prefer RICS valuations? These surveyors are impartial with no interest in the sale price, they follow Red Book valuation standards, and they provide evidence-based assessments that stand up to scrutiny.

Estate agents offer free market appraisals that work for smaller estates. But HMRC may challenge these valuations, particularly if the property later sells for significantly more than the probate value.

Best practice for borderline cases is obtaining three valuations—two from estate agents and one from a RICS surveyor—then using the middle value with clear documentation of your rationale.

The valuation must reflect the date of death value, not the current market price. This matters if property values have changed significantly between death and sale. Keep evidence of the property's condition at death, including photographs, and records of comparable sale prices from that period.

HMRC's District Valuer Service can challenge any property valuation years after submission if they believe it's inaccurate.

Robert's house was valued at £340,000 by an estate agent (free) and £365,000 by a RICS surveyor (£450 fee). With the estate totaling £420,000, Robert's executor used the RICS valuation to protect against HMRC challenge. Six months later, the District Valuer agreed with the valuation without dispute. The £450 surveyor fee prevented potential penalties worth thousands of pounds.

When valuing property held as tenants in common, apply a 10-15% discount to the deceased's share. This discount reflects the unmarketability of partial property interests.

The 7 Most Common Estate Valuation Mistakes (And How to Avoid Them)

These mistakes trigger most HMRC challenges and executor liability issues.

Mistake 1: Using Insurance Valuations Instead of Market Value

Insurance values represent replacement cost—what it would cost to buy a new equivalent. Market value is what the used item would fetch at auction or in a sale.

Insurance values often run 2-3 times higher than market value. An antique ring insured for £8,000 might have a market value of only £2,400. Using the insurance value overstates the estate by £5,600 and creates unnecessary tax liability.

Mistake 2: Undervaluing or Omitting Personal Belongings

This is the most common area for HMRC challenges. Executors write "household contents £500" without checking individual items that might be valuable.

Check systematically. That "old furniture" might include mid-century designer pieces worth thousands. Those "dusty books" in the attic could be rare first editions.

Mistake 3: Forgetting Gifts Made in Last 7 Years

HMRC expects executors to review seven years of bank statements looking for gifts over the £3,000 annual exemption.

A father gave his daughter £25,000 four years before death. The executor didn't declare it on the IHT400 form. HMRC discovered the gift and imposed a penalty of £7,500—30% of the gift value for careless omission.

Mistake 4: Using Wrong Valuation Date

You must use date of death values, not current prices when you're completing the forms or selling assets.

A house worth £310,000 when someone died in March 2023 sold for £345,000 in September 2023. The executor must use £310,000 for inheritance tax purposes and report the £35,000 capital gain separately.

Mistake 5: Not Getting Professional Help for Valuable Items

Antiques, jewelry, art, rare books, and collections require professional valuations for items over £500. HMRC frequently challenges DIY valuations in these categories.

Professional valuers cost £85-500 depending on the item type and complexity, but they protect you from challenges worth far more.

Mistake 6: Poor Documentation

Keep all valuation evidence: written quotes, professional reports, estate agent letters, photographs. HMRC can investigate months or years after you submit forms.

An executor got a verbal jewelry valuation but no written report. When HMRC challenged the valuation 18 months later, she had no evidence to support her figures. The penalty was £4,200 for unsubstantiated valuations.

Mistake 7: Incorrect IHT Form (400 vs 205)

Using simplified IHT205 when IHT400 is required triggers automatic penalties. You must use IHT400 if the estate exceeds thresholds, includes business assets, foreign property, or trusts.

Prevention checklist:

  • Review 7 years of bank statements for gifts
  • Get professional valuations for items over £500
  • Use market value (not insurance value) for all assets
  • Keep written evidence of all valuations
  • Photograph property and possessions at date of death
  • Use a RICS surveyor if the estate is near the inheritance tax threshold
  • Choose the correct IHT form (400 vs 205)

HMRC penalties reach up to 100% of additional tax due for deliberate undervaluation. Undervalued or omitted assets rank among the most common reasons for penalties.

IHT400 vs IHT205: Which Form You Need and How to Complete It

Choosing the correct form is critical. Using the wrong form triggers penalties even if your valuation is accurate.

IHT205 (Simplified Form for Excepted Estates)

Use IHT205 when the estate is under £325,000, or under £650,000 with spouse exemption transferred, or when the entire estate passes to a spouse or registered charity.

For deaths since January 2022, many excepted estates don't need IHT205 at all if you're applying for probate in England and Wales. The probate application itself captures basic inheritance tax details.

The simplified form requires only basic estate value and an assets summary—no detailed breakdown or supporting documentation for each item. You can use estimated figures if exact values aren't available.

IHT400 (Full Estate Details)

You must use IHT400 when estates exceed thresholds, include business assets, foreign property, trusts, or gifts over £3,000 in the last seven years.

This form requires detailed asset-by-asset valuation with supporting schedules and evidence. You must attach copies of professional valuations for property, businesses, and valuable items.

Provisional estimates are allowed only in exceptional circumstances. List all provisional estimates in Box 121 and update HMRC when final values are determined.

The deadline is 12 months from death. Late submission triggers penalties of £200 or more.

Supporting Schedules for IHT400

Different asset types require specific schedules:

  • IHT405: UK property and land
  • IHT406 and IHT417: Foreign assets
  • IHT413: Business property relief
  • IHT414: Agricultural property relief

Common Completion Errors

Using the wrong form when IHT400 is needed creates automatic penalties. Executors frequently omit joint assets or lifetime gifts, fail to explain estimated valuations, miss supporting documentation, or don't update provisional estimates within 18 months.

Timeline Requirements

Submit IHT400 within 12 months of death. Pay tax within 6 months to avoid interest. Update valuations within 18 months or when final values are known if land, property, or unlisted shares change by £50,000 or more.

An estate valued at £480,000 included a £350,000 house (schedule IHT405), £85,000 in savings, £30,000 in shares, and £15,000 in personal items. The deceased had given his son £20,000 five years earlier. The executor had to use IHT400 because the estate exceeded the threshold and included a substantial gift. The simplified IHT205 wasn't an option despite the estate being relatively straightforward.

What Happens If HMRC Challenges Your Valuation

HMRC's District Valuer Service employs over 400 chartered surveyors specifically to challenge estate valuations they believe are incorrect.

HMRC challenges valuations when property values seem low compared to comparable sales, when a house sells for significantly more than the probate value, when they spot patterns of undervaluation, or during random compliance checks.

The challenge process can take months. The District Valuer may visit the property, review comparable sales in the area, and negotiate with your surveyor if you used one. If HMRC determines the valuation was too low, you face additional inheritance tax plus penalties plus interest on the late payment.

The Penalty Regime

Finance Act 2007 Schedule 24 sets penalty ranges based on behavior:

Careless errors attract 0-30% of the additional tax due. Typical first offences receive 15% penalties.

Deliberate undervaluation costs 20-70% of additional tax.

Deliberate and concealed undervaluation triggers 30-100% of additional tax.

Executors are personally liable for both penalties and tax shortfalls.

How to Defend a Valuation

Strong defenses include a professional RICS report with evidence and comparables, photographs showing property condition at the date of death, records of defects or needed repairs, and comparable sale evidence from the date of death period.

What Triggers Investigations

Large differences between probate value and later sale price raise red flags, even if the sale is many months later. Round numbers suggesting estimates rather than proper valuations attract scrutiny. Patterns across multiple assets or estate values sitting just below inheritance tax thresholds appear suspiciously convenient to HMRC.

Interest charges apply from six months after death until payment. Current rates are 7.5% (though this varies) and can add thousands to the tax bill if payment is delayed.

Karen used an estate agent's £295,000 valuation. The house sold eight months later for £340,000. HMRC's District Valuer challenged and assessed the property at £325,000 at the date of death. Additional inheritance tax came to £12,000. The penalty for carelessness was £1,800 (15% of the additional tax). Interest charges added £890. Total cost: £14,690. A professional RICS valuation costing £450 would have provided defensible evidence and likely prevented the challenge entirely.

How to Protect Yourself from Personal Liability

Executors face significant personal liability for valuation errors. Follow these strategies to minimize your risk.

Best Practice Checklist

  • Get professional RICS valuations for estates near or over the inheritance tax threshold
  • Keep written records of all valuations and supporting evidence
  • Photograph property and valuable items at the date of death
  • Review seven years of bank statements for gifts
  • Obtain multiple valuations for significant assets and document why you chose a specific figure
  • Use the correct IHT form (400 vs 205)
  • Disclose all provisional estimates and update HMRC when final values are known
  • Don't distribute the estate until all tax is paid—executors remain liable even after distribution

When Professional Help Is Worth the Cost

Probate solicitors charge £2,500 or 2.5-5% of estate value. RICS surveyors cost £295-£800 per property. Specialist valuers charge £85-500 per item type for jewelry, art, or antiques. Accountants preparing IHT400 forms cost £800-2,500.

Compare these costs against the risk. Professional fees protect against penalties running 10-100 times higher than the service cost.

Executor Insurance

Executor insurance covers liability for mistakes. Typical cost runs £150-400 for standard estates. Complex estates may require this insurance. It doesn't cover deliberate wrongdoing.

Joint Executors Face Shared Liability

All executors are jointly and severally liable. Each can be pursued for the full amount of any shortfall. This makes it crucial to agree on professional help and document all decisions in writing.

When to Renounce Executorship

Consider renouncing if the estate is too complex for a lay executor, potential family disputes exist over valuations, significant inheritance tax liability creates valuation uncertainty, or the estate includes business assets or foreign property.

You can renounce before starting your role but not after you've begun acting as executor.

Three siblings were appointed joint executors of a £740,000 estate. Two wanted to save money with DIY valuations. Sarah insisted on a RICS surveyor costing £650. The surveyor discovered the property needed £35,000 of structural repairs that Sarah hadn't noticed, reducing the valuation from £420,000 to £385,000. This saved £14,000 in unnecessary inheritance tax. All three executors were protected from HMRC challenge. The £650 investment protected over £14,000 in tax and potential penalties.

The case of Harris v HMRC (2018) confirmed that executors remain personally liable for unpaid tax even after distributing the estate. This means you cannot escape liability by completing your duties quickly.

Frequently Asked Questions

Q: What is the current inheritance tax threshold for probate in 2025?

A: The nil-rate band is £325,000 for all estates. You may also qualify for an additional residence nil-rate band of up to £175,000 if you're passing a main residence to direct descendants. Married couples can combine their allowances for a potential total of £1 million. These thresholds are frozen until April 2031.

Q: Do I need a professional valuation for probate?

A: For estates over £325,000 or properties worth over £250,000, HMRC typically requires a professional RICS chartered surveyor valuation costing £295-£800. For smaller estates, you can use estate agent valuations or reasonable estimates for items under £500. Professional valuations protect you from HMRC challenges and personal liability for careless valuation.

Q: What happens if HMRC challenges my estate valuation?

A: HMRC's District Valuer Service can investigate valuations they believe are incorrect. If they find deliberate or careless undervaluation, penalties can reach 100% of the additional tax due, and executors can be held personally liable for shortfalls. The DVS employs over 400 chartered surveyors and can challenge valuations months or years after submission.

Q: How do I value jointly owned property for probate?

A: For joint tenants, the property passes automatically to survivors and isn't part of the estate. For tenants in common, value the deceased's specific share (often 50% but can be any proportion). You can apply a 10-15% discount to reflect the difficulty of selling a partial property interest. Check ownership type via a £3 Land Registry search.

Q: What is the deadline for paying inheritance tax on an estate?

A: You must pay inheritance tax by the end of the sixth month after death to avoid interest charges. For example, if someone died in January, tax is due by 31 July. The IHT400 form must be submitted within 12 months of death, with penalties of £200 or more for late filing.

Q: Can I use estimates when valuing an estate for probate?

A: HMRC allows estimates for estates under £250,000 if you cannot determine exact values. However, you must explain how you arrived at estimates and never use guesswork. For IHT400 forms, list all provisional estimates in box 121 and update HMRC when final values are known (within 18 months or when values are finalized).

Q: What assets must be included in an estate valuation?

A: Include all UK assets (property, bank accounts, investments, pensions, vehicles, personal possessions), the deceased's share of jointly owned assets, foreign assets, gifts made in the last 7 years, and debts or liabilities to be deducted from the total. Review seven years of bank statements to identify gifts over the £3,000 annual exemption.

Conclusion

Key takeaways:

  • Estate valuation for probate requires accurate market value of all assets at date of death, using the Inheritance Tax Act standard of what property would fetch on the open market
  • Estates over £325,000 (or £500,000 with residence nil-rate band) typically need professional RICS property valuations costing £295-£800 to protect against HMRC challenges
  • The 7 most common mistakes—using insurance values, omitting personal items, forgetting 7-year gifts, poor documentation—trigger HMRC challenges and penalties up to 100% of additional tax
  • IHT400 form requires detailed evidence and must be submitted within 12 months, with tax due within 6 months to avoid interest charges currently running at 7.5%
  • Executors face personal liability for valuation errors even after distributing the estate, making professional valuations and thorough documentation essential protection

Going through probate as an executor reveals exactly how much complexity and stress you might leave your own family. Every undervalued antique, every missing bank statement, every judgment call about what needs professional valuation creates anxiety and potential liability for the people you love.

The best time to organize your estate and create a clear will with comprehensive asset records is now, while you can spare your executors the challenges Emma, Karen, and Robert's families faced.

Need Help with Your Will?

Going through estate valuation as an executor shows exactly how much complexity and stress poor documentation creates for the people handling your affairs. The decisions you're making now—professional valuations, detailed asset lists, HMRC form completion—are the same challenges you can spare your own family by creating a well-organized will with clear asset records.

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Legal Disclaimer: This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.

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