Probate: Do you have to do a detailed valuation if no inheritance tax?

[Ankleblisters]

As per title, if the estate is passing in full directly from one spouse to the other and won't be subject to inheritance tax, is a full, detailed valuation of the estate needed or is a rough estimate okay?

Asking this on my father's behalf. My mother recently died (very unexpected and we are all still in shock). He is currently dealing with probate and the form asks for a valuation of her property. Much of it was joint but she also had accounts and property in her own name. None of this is subject to inheritance tax as it is all passing directly to her husband so exempt from inheritance tax. In this case, how exact and detailed does this valuation need to be?

He has informally asked a solicitor we know but can't seem to find a straightforward answer.

Online info is contradictory and he is getting stressed out as he is obviously having a really hard time right now.

Just a rough estimate. Anything in joint accounts does not have to be declared as it passed to him immediately on death. You can estimate the home value by looking on Zoopla.

Thank, that's really helpful

If the house is jointly owned does it still need to be declared? Only the car was in her name solely.

its 15 years ago but everything passed to me when my husband died as per his will. I didn't have to provide any kind of valuation. I did have to do a final tax return for him as it was mid tax year and the estate was entitled to a refund. I made an absolute mess up of it and the nice person at the tax office re did it for me. Here is what the .gov says.
"There’s normally no Inheritance Tax to pay if either:

• the value of the estate is below the £325,000 threshold
• you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club"

so in your case. everything below the IHT threshhold is going to the spouse AND everything above it so no need for a valuation of any kind because you KNOW there is no IHT to pay. Link www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value

Does he even need probate at all?? Pretty common for probate not to be applied for when all estate passes to the surviving spouse under a simple will leaving everything to the surviving spouse. Banks etc will usually accept sight of the will and death certificate for relatively low values of savings etc and only insist on probate above certain limits (which unhelpfully vary from bank to bank).

Neither my mother nor MIL went through probate when their respective husbands died. Both just provided death certificates and wills and the banks released the funds to the surviving spouse. I know my mother asked her solicitor (who drew up the will and dealt with their house purchase) whether probate was needed and he confirmed not needed in view of the entire estate passing to her because she was on the deeds of the house.

They both subsequently sold their respective marital homes and had no problems with the homes being in joint names on the deeds, as likewise they just produced the death certificate and will, which seemed to satisfy the solicitors etc and the sales went through no problem.

On second death, no declarations needed for value of estate on first death - just a claim to inherit the father's/FIL's nil rate band to double up the IHT threshold.

I'd say your father needs to first check whether anyone actually needs probate before starting down that road.

Was it owned as tenants in common or as joint tenants?? The devil is in the detail.

i think you need probate to access some accounts, Premium Bonds is a very low amount, £5k, banks generally have an amount up to £50k before it's needed, need to check individual accounts

I'm very sorry for your loss, we lost my mum very suddenly a year ago, and my 80 year old (very smart and competent) dad really struggled with the sadmin side of things, we helped him out a lot. My advice would be just to wait a while if you can, to tackle anything like probate. It can be overwhelming to navigate when so deep in grief, especially for someone older. If it can wait, set it aside and just do the essentials, it can wait til everyone's feeling a bit straighter. Wishing you all well.

It depends what the other assets and property in her own name are.

Whilst there won't be IHT on anything that passes to the remaining spouse, due the spousal exemption, it is important to need to determine a realistic value as that then becomes the base cost for the remaining spouses' ownership of the assets.

Probably wouldn't matter much with the main home due to principal residence relief, but very much could matter for other assets to determine the appropriate base cost in the event of a sale by the remaining spouse.

Doesn't have to be 'formal', get a couple of estate agents to give a valuation for residential property.

Quoted shares, you can look at the listed value on the date of death.

Private shares, you may need a desktop valuation.

Car value, just look at AutoTrader, assuming it is a run of the mill car and not a classic. No capital gains on wasting assets, so not an issue for when he comes to eventually sell.

"Much of it was joint but she also had accounts and property in her own name."

I think some people may have missed this bit. Probate will definitely be required in this situation.

My understanding is that you only need a formal valuation of any property if you will have to pay IHT or in the event of certain other things like the estate is worth over £3 million, gave away more than £250k as gifts in the previous seven years, foreign assets over £100k and a few other things even if there is no IHT to pay.

In that situation you'll need to complete form IHT400 and give lots of details. This is when you need a surveyor to get a formal valuation done.
.

In contrast, if there is no IHT to pay and none of the other conditions apply either then you will be completing form IHT 205.

In this situation an informal valuation from an estate agent (or maybe get three and average them) would be fine if there is no IHT to pay and the property is just a normal residential property.

An excepted estate is one where you do not have to fill in any tax forms and simply apply online to HMCTS (if she had a Will).

https://www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate

You will need to report the estates value but not provide any evidence of the value. The applicant (executor or administrator) has to sign a statement of truth stating that this is the value to the best of their knowledge.

The IHT 205 was done away with a couple of years ago so if no IHT 400 is needed, then no tax forms to fill in.

"The IHT 205 was done away with a couple of years ago"

Thanks for that, I wasn't aware of that. It was 2021 when we went through that.

Thanks for correcting me.

Was your dad the executor of her will? Did dm have a will?

Sadly this sort of thing is always stressful, so why not see a solicitor. Yes it costs a bit but it’s much easier as they will tell you what they need from you. Then it’s just done and sorted out.

She did have a will and Dad is the executor and sole beneficiary. We did speak to a solicitor (my cousin) who is experienced with probate but the answer wasn't clear because of all the variables you've all identified - specifically the fact that banks set their own limits.

Apart from bank accounts the only property that was only in her name (not joint) was the car. For the property we are now trying to track down the answer to the Joint Tenants or Tenants in Common question.

We've only looked at one of her bank accounts so far and she is over the bank's limit by a couple of thousand pounds so it looks like we do need to apply for probate. But this thread has been incredibly helpful in telling us that we only need an estimate of the estate value rather than a detailed and exact breakdown.

Thanks very much to all of you.

"For the property we are now trying to track down the answer to the Joint Tenants or Tenants in Common question."

That's a straightforward thing to do.

"Dad is the ... sole beneficiary"

In that situation there would be no benefit to being tenants in common. With tenants in common, your mum would have left her half of the property to you (and your siblings if any) and your dad would be given a life interest to remain living in the house.

There would be a clause calling your dad something like a "Life Tenant".

The fact that your dad is the sole beneficiary really does suggest that they were joint tenants.

If you really want to be sure then you can get a copy of the title deeds from the Land Registry for £7

https://www.gov.uk/search-property-information-land-registry

Once you get the title deeds, if they are tenants in common then there will be an entry like this:

"RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court."

If a statement like that is not on the deeds then they own it as joint tenants.

That is in England & Wales, if you are in Scotland then the terminology is different.

I’m surprised DF was executor. We have mirror wills (at the moment) and I’d not expect DH to be executor or me his executor - if both die together or one gets ill, it’s impossible. I’d try and ensure DF changes his will if executor was DM. Needs to be a generation down. DH and me are 70 plus so a younger executor is vital.

I just estimated when I did my Mums probate

Many wills will give an order of preference for the executor, to cover that exact scenario so that if the first choice executor has died, then the next choice would stand. Or they specify joint executors so that if one dies, the other can still act in accordance with the will. Those making wills really need to build in "what if" scenarios to cover the most likely situations.

Yes, that's what my parents' wills specified. When my Dad died my Mum was executor in theory, but in practice I did virtually everything for her and she just signed things off. When she dies her will states that my Dad is the executor but if he has predeceased her then my brother and I are to be the joint executors. I would have thought that was the usual arrangement.

It’s just that when you are really old, it’s a worry and stating a dc is easier. We never thought of each other for a second: too complex!

When my husband died , we were 'tenants in common '. I phoned the Land Registry Office and asked how to get the house in just my name. ( everything was left to me in his will) A helpful lady took my call and sent me forms which were very straightforward to fill in.

There was spaces on these forms where it asked if a solicitor was completing the form. I would love to know how much a solicitor would charge for this service, if l remember correctly it cost me nothing.
TizerorFizz our wills said husband or wife to be executor, but if we were unable or didn't want to, then our children were executors. I was pleased to do the probate (only necessary because one bank was over their limit, which was annoying) and l just got on with it and liked seeing how it all happened.

@Frankley I’ve done a lot for DM when she died but not doing it for DH!! Too difficult!

They may have put the property in your name but I believe that the restriction may remain. Therefore when you eventually die, it will need to be dealt with and probate will likely be required for your late husbands estate, if you do not already have it.

It’s an odd thing and IMO not very helpful that the LR do this and let you assume all is well. If you were to sell there are ways to get around the restriction but it’s worth walking to a conveyancer now to find out, when this would be easier to resolve.

This is why people pay for this stuff. So it’s done correctly and no issues down the line.

If you sent them probate and you managed to do it completely right yourself, hats off, it’s not easy. I would not have a clue!

Sorry I see above on re-read that you did get probate. So even if the LR is wrong it will be easy to sort out I’m sure.