Valuing the estate

By Tolley in association with Higgs & Sons
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The following Trusts and Inheritance Tax guidance note by Tolley in association with Higgs & Sons provides comprehensive and up to date tax information covering:

  • Valuing the estate
  • Overview
  • Banks and Building Societies
  • Investment managers and stockbrokers
  • State pension / private pension / any other benefits
  • National Savings
  • Life insurance policies
  • Unquoted shares
  • Deceased’s place of employment or business
  • Valuation of house, land, and buildings
  • Credit card
  • Loan enquiry
  • HMRC or the deceased’s tax adviser

Overview

When the personal representatives (or their professional advisers) have been through the deceased’s paperwork and have identified the institutions that may hold assets on behalf of the deceased, the next stage is to write to those institutions to notify them of the death, and to obtain details and asset values as at the date of death. There may also be liabilities of the estate which also must be valued as at the date of death. This guidance note will identify the information that should be requested from the institutions and provide sample letters.

Prior to reading this guidance note, reference should be made to the IHT principles of valuation set out in detail in the Valuation of property guidance note. The personal representatives must identify the open market value of the assets at all times, as defined in IHTA 1984, s 160. This is the price the asset might reasonably be expected to fetch if sold in the open market immediately before the deceased died. The basis for valuation may be modified in certain circumstances, eg where related property is found.

IHTA 1984, s 161

In addition, a discount may be applied to the open market value where an asset is held jointly with another. Personal representatives should be wary where assets are held by the deceased jointly with another to identify as to what percentage he owns, as it may not be 50%. Caution must be exercised when dealing with bank accounts owned by the deceased in which a second person is named on the account purely for administrative purposes, and not because that person has an interest in the account.

The personal representatives should always bear in mind the importance of making suitable enquiries of asset holders and other people. This is to ensure the extent of the estate is ascertained, the correct information is obtained and consequently,

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