Valuing an Estate for Probate UK (2026): What to Include and How to Do It
Updated 14 May 2026 · 8 min read · England & Wales
Before an executor can apply for a grant of probate, they must value the deceased’s entire estate at the date of death and report that value to HMRC. Getting the valuation right matters — HMRC can challenge undervaluations for up to 20 years and impose penalties up to 100% of unpaid tax. This guide covers what to value, how to value a house, which forms apply in 2026, and the key deadlines.
Gross value vs net value — why both matter
Two figures are required:
| Figure | What it is | Why it matters |
|---|---|---|
| Gross estate value | Total open-market value of all assets — before debts | Determines whether estate is ‘excepted’ (below IHT threshold); sets probate court fee |
| Net estate value | Gross value minus debts and liabilities | Used to calculate IHT payable after nil rate band and reliefs |
Debts deducted include: mortgages, credit card balances, personal loans, unpaid utility bills, and funeral expenses (a first charge on the estate).
Complete asset checklist for estate valuation
- Property and land — value at open-market value at date of death. Three estate-agent letters are acceptable for straightforward residential property; a RICS Red Book valuation is required for high-value, complex, or disputed property. For jointly owned property, value only the deceased’s share (with a co-ownership discount of 10–15% for a half share).
- Bank and savings accounts — request a written bereavement balance letter from each bank and building society showing the balance on the date of death.
- Investments and shares — value at the ‘quarter-up’ price on the date of death (middle market price plus a quarter of the bid-offer spread), using London Stock Exchange closing prices or the fund manager’s published unit price.
- ISAs — the full value forms part of the estate; the ISA wrapper does not protect against IHT on death. See: ISA inheritance tax UK.
- Life insurance not in trust — the sum assured is a probate asset valued at the policy death benefit. Life insurance written in trust passes outside the estate.
- Personal possessions — furniture, jewellery, vehicles, art, and antiques valued at open-market value. High-value items should be professionally valued (jewellery valuer, art specialist). Standard household contents are usually valued at a reasonable estimate for a house clearance sale.
- Business interests — obtain a professional valuation; may qualify for business property relief (100% or 50%).
- Foreign assets — must be reported on IHT400; value in sterling at date-of-death exchange rates.
- Pension death benefits — normally fall outside the estate (discretionary trust held by trustees); not a probate asset. Report only if the scheme pays a death benefit into the estate. Note: pension reform from April 2027 will bring most pension death benefits into the IHT estate.
Which HMRC form applies in 2026?
The IHT205 was abolished for deaths on or after 1 January 2022. The current routes are:
| Route | When it applies | Action required |
|---|---|---|
| Excepted estate (PA1P / PA1A) | Gross estate below £325,000 (or up to £650,000 with transferable NRB; up to £500,000 with RNRB). No foreign assets, trusts, or gifts in seven years | Complete the IHT threshold questions in the probate application form — no separate HMRC form needed |
| IHT400 | Estate does not qualify as excepted: taxable estate, foreign assets, seven-year gifts, trusts, business or agricultural interests | Submit IHT400 and all relevant schedules to HMRC; pay IHT before applying for probate |
The IHT payment deadline
Inheritance tax must be paid within six months of the end of the month of death. Interest accrues at 7.75% (from April 2025) on late payments. For land and property, IHT can be paid in ten annual instalments — but interest runs on missed instalments.
The main practical problem: most assets cannot be sold or transferred until probate is granted — but IHT must be paid before probate is granted. Solutions used in practice:
- Banks will release funds directly to HMRC to pay IHT before probate (Direct Payment Scheme)
- Life insurance in trust pays immediately and can fund the IHT bill
- Short-term bridging finance from the estate
How HMRC challenges estate valuations
HMRC’s Valuation Office Agency (VOA) reviews submitted property values and opens enquiries when they appear undervalued. HMRC can challenge valuations for up to 20 years after death in cases of negligence or fraud. Penalties range from 15% (prompted inaccuracy) to 100% (deliberate concealment) of the unpaid tax.
Best protection: obtain a RICS Red Book valuation for property; keep contemporaneous records of all valuations; open a dedicated executor bank account to track estate funds.
Frequently asked questions
What is the difference between the gross estate value and the net estate value?
The gross estate value is the total open-market value of all assets owned by the deceased at the date of death, before any deductions. The net estate value is the gross value minus debts and liabilities — mortgages outstanding on property, credit card balances, personal loans, unpaid utility bills, and funeral expenses (which are a first charge on the estate). HMRC requires both figures: the gross value to determine whether the estate qualifies as an 'excepted estate' (below the IHT threshold), and the net value to calculate any inheritance tax due. For probate, the gross value determines the court fee. For IHT purposes, the net value after deducting available nil rate band and reliefs determines the tax payable.
How do you value a property for probate in England and Wales?
Property must be valued at its open-market value on the date of death — the price a willing buyer would pay a willing seller on the open market on that date. HMRC expects executors to obtain an independent valuation: either three estate agent letters giving their opinion of value (acceptable for straightforward residential property), or a formal RICS Red Book valuation from a qualified surveyor (required for complex or high-value property, or where HMRC challenges a submitted value). The estate agent valuations should be obtained at or around the date of death — not months later. HMRC's Valuation Office Agency (VOA) can challenge the submitted value and impose penalties of up to 100% of unpaid tax on deliberate undervaluation. A RICS valuation offers the strongest protection against challenge. For jointly owned property, the deceased's share (not the whole property) is valued, usually with a discount for co-ownership (typically 10–15% for a half share in residential property).
What assets must be included in the estate valuation for probate?
All assets owned by the deceased at the date of death must be included at open-market value: (1) Property and land — including any share of jointly owned property; (2) Bank and savings accounts — request a written balance confirmation (bereavement balance letter) from each bank and building society; (3) Investments — shares, ISAs, investment bonds, unit trusts, valued at the 'quarter-up' price on the date of death (middle market price plus a quarter of the difference between the bid and offer price); (4) Life insurance policies not written in trust — the sum assured forms part of the estate; (5) Personal possessions — furniture, jewellery, vehicles, art, antiques; high-value items should be professionally valued; (6) Business interests — a business interest should be professionally valued; (7) Money owed to the deceased — loans, rental deposits, accrued salary; (8) Foreign assets — overseas property and bank accounts (subject to the law of the country where situated but reported on IHT400). Assets passing automatically outside the estate — such as jointly owned property passing by survivorship, life insurance written in trust, and pension death benefits — are not included as probate assets but may still be relevant for IHT.
Has the IHT205 form been abolished — which form do I use now?
Yes — the IHT205 (return of estate information for excepted estates) was abolished for deaths on or after 1 January 2022. For deaths from that date onwards, the simplified excepted estate route is now handled entirely within the probate application forms: PA1P (where there is a will) or PA1A (on intestacy). Executors simply complete the IHT threshold questions on the PA1 form and declare the estate is excepted — no separate HMRC form is needed. An estate qualifies as an excepted estate if: the gross value is below £325,000 (or £650,000 if the transferable nil rate band is available from a deceased spouse or civil partner), or below £500,000 if the residence nil rate band applies and the whole estate passes to direct descendants. If the estate does not qualify as excepted — because assets exceed the threshold, there are foreign assets, gifts made in the seven years before death, trusts, or business/agricultural interests — executors must complete IHT400 and submit it to HMRC before applying for probate.
What is the deadline for paying inheritance tax and what happens if you miss it?
Inheritance tax must be paid to HMRC within six months of the end of the month in which the deceased died. For example, if death was in March 2026, IHT must be paid by 30 September 2026. Interest currently accrues at HMRC's late payment rate (7.75% from April 2025) from the due date until payment. For some assets — mainly land, property, and business interests — IHT can be paid in ten annual instalments (the 'instalment option') without interest accruing provided payments are made on time; interest runs from the due date of each missed instalment. The problem for executors is that probate is required before most assets can be realised to pay the IHT — creating a 'chicken and egg' situation. Solutions: banks will often release funds direct to HMRC before probate to pay IHT; life insurance proceeds in trust are available immediately; the estate can take a short-term bridging loan. HMRC can challenge estate valuations for up to 20 years after death and impose penalties of 15–100% of unpaid tax for inaccuracy or failure to take reasonable care.
Do jointly owned assets need to be included in the estate valuation?
Yes — jointly owned assets must be included, but the treatment depends on how the property was held. Joint tenants: on death, the deceased's interest automatically passes to the surviving owner(s) by survivorship — it does not form part of the probate estate. However, it must still be reported to HMRC at its value for IHT purposes (unless it passes to a spouse and the spouse exemption applies). Tenants in common: the deceased's percentage share of the property does form part of the probate estate and must be valued and administered like any other estate asset. For jointly held bank accounts, the whole balance is usually treated as the deceased's for IHT purposes unless evidence shows the surviving joint account holder contributed funds.
What happens if HMRC disputes the estate valuation?
HMRC's Valuation Office Agency (VOA) reviews submitted estate values, particularly for property. If HMRC believes the stated value is too low, they will open an enquiry and propose a higher figure. The executor can negotiate, provide comparables, and appoint a surveyor to support the original valuation. If agreement cannot be reached, the matter is referred to the First-tier Tribunal (Property Chamber). HMRC can charge penalties: 15% of unpaid tax for 'prompted inaccuracy'; up to 30% for unprompted inaccuracy; up to 70% for a deliberate inaccuracy; up to 100% for deliberate concealment. HMRC has up to 20 years from the date of delivery of the IHT account to make an assessment in cases of fraud or negligent conduct. Obtaining independent professional valuations — particularly from a RICS-qualified surveyor for property — is the best protection against dispute and penalty.
Make probate easier with a well-drafted will
A clear will with updated asset lists makes the executor’s valuation job far simpler — and reduces the risk of disputes. WillSafe’s will kit includes an executor guidance letter and asset-recording checklist.
Get the Will Kit →Related guides
- Executor duties checklist UK
- How to apply for probate UK
- Inheritance tax threshold UK 2026
- Excepted estates UK — when you don’t need to file IHT400
- Probate fees UK 2026