IHT—valuation principles and particular types of property
Produced in partnership with Ailsa Moorhouse, with contributions from James Sedgley of Penningtons Manches LLP
IHT—valuation principles and particular types of property

The following Private Client guidance note Produced in partnership with Ailsa Moorhouse, with contributions from James Sedgley of Penningtons Manches LLP provides comprehensive and up to date legal information covering:

  • IHT—valuation principles and particular types of property
  • The need to value the estate
  • Identifying the assets
  • The basis of valuation
  • Valuing listed shares
  • Valuing unlisted shares
  • Valuing bank and building society accounts and National Savings & Investments products
  • Valuing sole traders' businesses and partnerships
  • Valuing land, buildings and interests in land
  • Valuing household and personal goods
  • more

The need to value the estate

When an individual dies they are considered to have made a 'transfer of value' equal to the value of their estate immediately before death. This transfer is chargeable to inheritance tax (IHT). As a result, depending on its value and the availability of exemptions and/or reliefs, the estate may be liable to IHT.

This potential tax liability and their responsibility to report the value of the estate to HMRC (whether directly to HMRC or via the probate registry with the application for the grant of representation, depending on whether or not the estate is an 'excepted estate') is one reason the personal representatives (PRs) must value the contents of an estate. When signing the IHT account, the PRs must confirm that the information they are providing is correct and complete and that they have made the fullest enquiries that are reasonably practicable in the circumstances to determine the value of the assets declared in the IHT account. Valuation is also undertaken to determine the value of the estate passing to the PRs under the grant of representation and the value of an asset at the time it is transferred to them or a beneficiary for capital gains tax (CGT) purposes.

Identifying the assets

The PRs must first identify the assets and liabilities in