How to Value a House for Probate UK (2026): RICS, Estate Agents & HMRC Rules

For probate purposes, a property must be valued at its 'open market value' at the date of death — that is, the price a willing buyer would pay to a willing seller in an arm's-length transaction in the open market on the day the deceased died. This is required under section 160 of the Inheritance Tax Act 1984 (IHTA 1984). The value is not what the property might have sold for months earlier or later, nor what was paid for it — it is the market value specifically on the date of death, as if it had been offered for sale on that day. If the property was let at the date of death, the vacant possession value is the starting point, but a discount may be appropriate if the tenancy significantly affects marketability. If the property was in poor condition at the date of death, the value reflects its condition at that date — not what it might be worth after renovation. If the deceased owned only a share of the property (for example, as tenants in common with someone else), the value for IHT is the deceased's proportionate share, potentially with a discount for the fact that a partial interest is harder to sell. The property value is declared to HMRC on the IHT return (IHT400 for taxable estates, IHT205 for excepted estates) and forms the basis for calculating any IHT liability. It also becomes the CGT base cost for whoever inherits the property — so the probate value matters both at the time of death and at the time of any future sale.

Both a RICS (Royal Institution of Chartered Surveyors) Red Book valuation and a written estate agent's opinion of market value are accepted by HMRC for probate purposes. The choice depends on the complexity of the estate and the likely IHT position. RICS Red Book valuation: this is a formal valuation report carried out by a qualified RICS-registered valuer under the RICS Valuation — Global Standards (the 'Red Book'). The valuer physically inspects the property and provides a written report with a reasoned opinion of value, supported by comparable evidence. A Red Book report provides the strongest evidence base if HMRC questions the valuation. Costs typically range from £300 to £800 for a standard residential property, depending on size and location. Estate agent's written opinion: most estate agents will provide a free written opinion of market value (distinct from a marketing appraisal) for probate purposes. The opinion should be in writing on the agent's headed paper, state the address and date of inspection, and give a clear opinion of open market value at the date of death. Written opinions from two or three local agents can strengthen the evidence. Estate agent opinions are generally sufficient for HMRC in most cases. When a RICS report is strongly advisable: for high-value properties (over £1 million); for unusual or complex properties (listed buildings, rural estates, properties with development potential); where there is a real risk of HMRC challenge; or where the executors are not resident in the UK and the estate is subject to detailed HMRC scrutiny.

HMRC's Shares and Assets Valuation (SAV) team reviews property valuations declared on IHT returns. As a general rule of thumb in practice (not a formally published statutory rule), HMRC tends not to raise a challenge if the declared probate value is within approximately 15% of what HMRC's own valuer believes the open market value to be. If the declared value is more than 15% below HMRC's assessment, HMRC may open a formal negotiation to agree a higher value — increasing the IHT liability and potentially triggering an interest charge and penalties. The 15% figure should not be relied upon as a safe harbour or a deliberate discount strategy — it is simply an indication of where HMRC's resources are typically deployed. Intentionally undervaluing a property to reduce IHT is a form of tax evasion and can attract penalties under the Finance Act 2008 Schedule 36 (failure to notify) and the IHT (Determination of Interest in Settled Property) Regulations. If the executor genuinely obtains and relies on a professional valuation, and HMRC later disagrees, the executor will not normally face penalties provided the valuation was reasonably obtained and disclosed. Penalties can arise where executors knowingly submit figures they believe to be wrong or fail to disclose relevant information. If HMRC challenges a probate valuation, the normal process is correspondence between HMRC's District Valuer (DV) and the executors' surveyor or solicitor, aiming to agree a revised figure. If no agreement is reached, the matter can be referred to the First-tier Tribunal (Tax).

A retrospective valuation is required when the estate needs to be valued after some time has passed since the date of death — for example, if probate is applied for many months after the death, or if HMRC later opens an enquiry into the estate. Most RICS valuers and experienced estate agents can provide a retrospective opinion of value at a historic date. To obtain a retrospective valuation: (1) Contact a RICS-registered valuer or an established local estate agent familiar with the area and type of property; (2) Provide the valuer with the exact address and the date of death; (3) The valuer researches comparable sales that were completed before or around the date of death (Zoopla, Rightmove, Land Registry HM Land Registry price data, and their own records) to establish what the market was doing at that point; (4) A formal written report or letter confirming the retrospective opinion of value at the stated date is issued. RICS Red Book requirements apply to retrospective valuations in the same way as current valuations. Some complications: if the market moved significantly between the date of death and the date of the retrospective valuation exercise, the valuer relies more heavily on comparable evidence from the specific period rather than general market conditions. For properties sold by the estate shortly after death, the actual sale price can sometimes be used as evidence of the open market value at death — but HMRC takes the view that the sale price is evidence, not conclusive proof, of the date-of-death value, particularly if market conditions changed significantly between death and sale.

Undervaluing a property on an IHT return — whether deliberately or carelessly — can have serious financial and legal consequences. Financial consequences: (1) IHT shortfall: if HMRC successfully argues the property was worth more than declared, additional IHT is assessed on the difference at 40% (or the applicable rate). On a £200,000 undervaluation, this is an additional £80,000 of IHT, plus interest from the date IHT was due (currently 7.75% per annum for late IHT); (2) Penalties: HMRC can impose penalties for incorrect returns under Schedule 24 Finance Act 2007. The penalty rate depends on the behaviour: careless (failure to take reasonable care) — penalty up to 30% of the additional tax; deliberate — penalty up to 70%; deliberate and concealed — penalty up to 100%. Most executors who obtained a professional valuation and disclosed it honestly will not face penalties even if HMRC later negotiates a higher value. Legal consequences for executors: executors have a duty of care to HMRC in relation to the accuracy of the IHT return (IHT400 or IHT205). An executor who submits a value they know to be significantly too low may face personal liability for the resulting underpayment of tax. If HMRC later queries the value, the executor must be able to demonstrate the basis for the figure declared — which is why a written valuation from a professional at the time of probate is essential. CGT consequences: the probate value is also the CGT base cost for the inheriting beneficiary. An artificially low probate value reduces the IHT estate but increases the eventual CGT gain when the property is sold, so undervaluing is not always financially advantageous overall.

Yes — the probate value is the CGT base cost for the person who inherits the property. This is one of the most important intersections between IHT and CGT planning. When a beneficiary later sells an inherited property, their CGT gain is calculated as: sale proceeds minus the probate value (plus allowable selling costs). A higher probate value means a lower CGT gain on eventual sale. A lower probate value means a higher CGT gain. This creates a tension between IHT and CGT: a lower probate value saves IHT (at 40%) but increases eventual CGT (at 18–24% for residential property). For a taxable estate, reducing the probate value by £100,000 saves £40,000 of IHT but, if the property is later sold for £100,000 more than the lower probate value, costs between £18,000 and £24,000 of additional CGT. The overall saving is therefore only £16,000–£22,000 — not the full £40,000. For an estate that is within the nil-rate band (so no IHT is payable regardless of value), the probate value has no IHT cost and the beneficiary benefits from a higher CGT base cost. The executor should use a genuinely defensible market value rather than trying to optimise across IHT and CGT — an artificially low value risks penalties, and an artificially high value is not supported by evidence. CGT on inherited property is reported and paid within 60 days of completion of the sale using the HMRC UK Property Account. The annual CGT exempt amount (£3,000 in 2025/26) applies. There is no CGT exemption specific to inherited property — the gain is calculated and taxed in the normal way.

When an executor sells a property during the administration of an estate (before it is assented to a beneficiary), any gain above the probate value is a capital gain of the estate — not of any individual beneficiary. The personal representatives (executors) are liable to pay CGT on gains made during the administration period. Rates: the personal representatives pay CGT at 24% on residential property gains (they do not get basic rate treatment — all gains are taxed at the higher rate). There is no annual CGT exempt amount for an estate in the second and subsequent tax years of administration; in the first tax year after the date of death, the estate gets the same annual exempt amount as an individual (£3,000 in 2025/26). Any gain must be reported via the HMRC UK Property Account within 60 days of completion. If the property sells for less than the probate value during administration: a capital loss is created. Estate capital losses can be set against estate capital gains in the same tax year, or carried forward to future tax years. A loss on sale of estate property cannot reduce the IHT payable (IHT is calculated at the date of death value), but the sale proceeds at a loss does form part of the evidence base for confirming that the original probate valuation was reasonable — if the property genuinely sold for less than probate value at arm's length, HMRC will usually accept this as confirmation that the probate value was not too low. Loss of value in a falling market between death and sale is relevant to any IHT challenge.