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Death and taxes are often said to be the two certainties in life says commercial property agent Prop-Search.
Certainly, consequent upon death, inheritance tax issues can arise and often the most significant asset in any deceased’s estate is its property assets. Quantifying the value of the property in the estate is included amongst the various responsibilities that Executors have to fulfil.
Property assets, such as dwellings, farmland, business premises and investment property are required to be valued in accordance with the statutory definition of value for inheritance tax purposes, found in Section 160 of the Inheritance Tax Act 1984, where it is defined as: -
“The value at any time of any property shall for the purposes of this Act be the price which the property might reasonably be expected to fetch is sold in the open market at that time; but that price shall not be assumed to be reduced on the ground that the whole property is placed on the market at one and the same time.”
Ian Harman, a Director at Prop-Search, says: “Probate properties differ enormously in size, condition and value, but the vast majority need to be sorted out, looked after and then sold. This process can be complex and comes at a time of emotional strain for the family and executors involved.”
“The value of assets for inheritance tax on death is their open market value at the date of death - ‘probate value’. Valuing the estate is a professional task and can account for a great deal of the time spent in administration.”
There are special rules for some types of asset to ensure the whole value is assessed. These include ‘heritage’ property, business property and agricultural property. The gross value of any business property must be adjusted for any liabilities secured on the assets over and above those indicated in the business accounts. For example, the deceased might have a controlling shareholding in a company and might have pledged this as security for loans that are outstanding at the death.
Prop-Search offers a comprehensive service designed take away the worry of dealing with the property and attend to the issues that arise. Our service starts with a free of charge initial discussion with a qualified RICS valuer who will assess your situation and requirements, and then guide you on the best way to proceed.
We can also provide more than a standard valuation for probate purposes. Alongside this, we can include advice on the best method of sale; on what might need to be done to the property to prepare it for sale and improvements that would be beneficial; and a rental market appraisal in its current condition or once any suggested works have taken place. This can help the executors to decide on the best course of action - to either keep and rent out the property or sell the asset.
Further information or advice can be obtained from Prop-Search - Tel: 01604 492000 / 01933 223300 or its website: www.prop-search.com