Property Valuation for IHT405

[Wyabcp]

Hi all
My mother owned one property outright and 50% as joint owner of second. In order to fill in IHT405 and subsequently the IHT400, is it necessary to have estate agents valuations? Or can we use recent sale prices of similar house's in local area?
many thanks

[PallasAthena]

It depends partly whether the values of the properties for IHT are clearly below the threshold (so no IHT due) or whether they are definitely over IHT threhold/on the borderline.

If clearly below then comparisons with local sales prices might be OK - if they really are genuine comparators - or get an Estate Agent to value (they may charge to do that if you aren't genuinely intending to sell). HMRC suggest get three Estate Agents and take the average.

But if IHT will definitely be payable HMRC recommend that a professional valuation by a surveyor should be obtained. "It is important to properly ascertain the value of assets. For assets with a material value you are strongly advised to instruct a qualified independent valuer, to make sure the valuation is made for the purposes of the relevant legislation, and for houses, land and buildings, it meets Royal Institution of Chartered Surveyors (RICS) or equivalent standards."

Have a read of this: How to value a house and its contents for probate | The Gazette

Be aware that HMRC check all property values submitted on IHT forms against other sources of property valuation data that they hold. If the value you give differs significantly from what they would expect they may start a full compliance investigation and you will have to explain how you arrived at the values.

[Pezza54]

An estate agent might over value the property hoping this will influence the seller to use their services if the property is sold
A chartered valuation surveyor will value the property for probate/IHT purposes. HMRC may place more trust in the surveyor's valuation
If the property is sold within 4 years of the date of death at an amount less than the probate value, an application can be made to HMRC for an IHT refund

[Wyabcp]

Thank you for all the help. One property is definitely above NRB about £700k+ but this is going direct to spouse (joint tenant) the 2nd property, fully owned by deceased and is going to deceaseds descendants, value around £320K. This should also benefit from RNRB.