Contact organisations about assets and debts

To help you value the estate of the person who died, write to organisations to find out about the person’s: assets, for example banks and pension providers debts, such as utility companies, mortgage lenders and credit card companies In your letter: ask for the value of the asset or debt when the person died include a copy of the death certificate Which organisations to contact Find organisations to contact about the person’s assets and debts by searching through their papers. You can also ask friends, family and any solicitor or accountant they had. Organisations that hold a person’s assets often include: their bank their pension provider - ask if you should include any private pension when you value the estate their employer - the person may be owed wages any companies they held shares in - include the number of shares, company details and the share certificate number (if you have it) National Savings and Investments (NS&I) for Premium Bonds - use the free tracing service if you can’t find certificates other organisations that hold assets like ISAs, shares, investments or assets in a trust their landlord, if they had one - the person may have paid rent in advance In your letter to the bank, also ask for: any standing orders and direct debits to be stopped (or transferred if they were in a joint name) a list of any share certificates or deeds they were holding for the person who died If the person had a mortgage Ask the mortgage lender if they require payments to continue while you’re applying for probate. If they do, you need to either: pay these bills yourself - and reclaim them from the estate once you’ve got probate check if the person had a life assurance or mortgage protection policy that covers these payments

Estimate the estate’s value

You need an estimate of the estate’s value to find out if there’s Inheritance Tax to pay. The estate won’t have to pay tax as long as it either: all passes to the dead person’s spouse or civil partner, a charity or a community amateur sports club has a value below the Inheritance Tax threshold of £325,000 If the person who died was widowed or is giving away their home to their children, the tax threshold can be higher . Whether there’s tax to pay will affect how you report the estate’s value, and the deadlines for reporting and paying any tax. Working out your estimate You need to estimate the ‘gross’ value of the estate. This is the value of the assets plus ‘gifts’. Gifts are certain assets (for example cash) given away in the 7 years before the person died. At this stage, your estimate only needs to be accurate enough for you to know if the estate owes tax. Assets Start by listing the person’s assets - the things the person owned with a value. These may include: assets held by organisations you’ve written to - such as money in the person’s bank account, pension or investments possessions - for example their house, jewellery, furniture or car payments when they died - for example life insurance or a lump sum ‘death benefit’ from a pension Then estimate the value of each on the date the person died. Use the asset’s realistic selling price on the open market. Include all assets in your estimate, including any left to the person’s spouse, civil partner or a charity. You won’t pay tax on these assets. Valuing joint assets Divide the value of the asset by 2 if it was owned jointly with the person’s spouse or civil partner. For property or land shared with others, divide the value by the number of owners. You can then take 10% off the share of the person who died. In Scotland, take £4,000 off the value of the whole asset before working out their share instead. If the person jointly owned property as a tenant in common , work out the value based on the person’s share. Some bank accounts are in joint names for convenience only, for example if an elderly person added their child to help them with the account. When valuing the account, use the amount the person actually owned, rather than dividing by the number of owners. Gifts Check bank statements or contact family members to find out about gifts of cash or other assets: in the 7 years before the person died if they totalled £3,000 or more per year - don’t include exempt gifts , such as those for birthdays or weddings at any time if they continued to benefit from a gift (for example they gave a house away but lived in it rent-free) or put a gift in a trust To estimate the value of each gift, use either: the approximate market value (realistic selling price) of the gift when it was made the realistic selling price of the gift when the deceased stopped benefitting from it (if they benefitted from the gift after giving it away) If the person gave away more than £325,000 before they died, the recipients may have to pay Inheritance Tax on their gifts . Debts Don’t include the estate’s debts when you estimate the gross value - but you’ll need to tell HM Revenue and Customs ( HMRC ) about them when you report the value of the estate. Check for records of debts when the person died, for example: their mortgage, loans, credit cards or overdrafts ‘liabilities’ like household bills or bills for goods or services they’d received but not yet paid for (like building work, decorators, accountants) Get the gross value of the estate Add the assets to any gifts to get the gross value. Ignore the debts at this stage. You can now start telling HMRC about the value of the estate .

Report the estate’s value to HMRC

When you’ve estimated the value of the estate you can: start reporting the value in detail to HM Revenue and Customs ( HMRC ) - you’ll find out whether you can report everything online or if you’ll need a paper form find out if there’s tax to pay and when to pay it Report the estate’s value You can also continue a report you’ve already started . Before you start You need to: have an estimate of the gross value of the estate have told organisations that the person has died - you’ll need this to give accurate valuations of the person’s assets or debts As part of telling HMRC about the estate, you work out its detailed ‘net’ value - this is assets plus gifts minus debts. You’ll need to know the net value if you need to apply for probate . Getting more accurate valuations When telling HMRC about Inheritance Tax, you’ll usually need more accurate valuations of the estate. This includes using a professional valuer for things over £1,500. You can continue using estimates if one of the following applies: the estate’s gross value is less than £250,000 all the estate passes to the dead person’s spouse or civil partner, a charity or organisations like museums or community amateur sports clubs If you need help Contact HMRC to get help with: probate Inheritance Tax

You must keep certain records after you value an estate. HM Revenue and Customs ( HMRC ) can ask to see your records up to 20 years after Inheritance Tax is paid. You must keep copies of any: will copies of signed Inheritance Tax forms and supporting documents records showing how you worked out the value of assets in the estate, for example an estate agent’s valuation documents showing any unused Inheritance Tax threshold that can be transferred to a surviving spouse or civil partner final accounts Final accounts Include any documents showing how you distributed money, property or personal belongings from the estate, for example: letters from HMRC confirming that you paid Inheritance Tax receipts showing debts paid, for example utilities bills receipts for your expenses from dealing with the estate written confirmation that ‘beneficiaries’ (anyone who inherited) received their share of the estate Send copies of the final accounts to all beneficiaries.

Valuing the estate of someone who's died

What you need to do

As part of applying for probate, you need to value the money, property and possessions (‘estate’) of the person who’s died.

You don’t need probate for all estates. Check if you need it.

This guide is also available in Welsh (Cymraeg).

You need to complete 3 main tasks when you value the estate.

Contact organisations such as banks or utility providers about the person’s assets and debts.
Estimate the estate’s value. This will affect how you report the value to HMRC, and the deadlines for reporting and paying any Inheritance Tax. Most estates aren’t taxed.
Report the value to HM Revenue and Customs (HMRC).

How long it takes

The process of valuing the estate can take 6 to 9 months, or longer for big or complicated estates (for example if they involve trusts or there’s tax to pay).

Deadlines

You don’t need to value the estate straight away after someone dies. There are only deadlines if the estate owes Inheritance Tax.

If it does, you’ll need to:

send Inheritance Tax forms within one year
start paying tax by the end of the sixth month after the person died - you can make a payment before you finish valuing the estate

Getting help

You can hire a professional (for example a solicitor) to help with some or all of the tasks involved with valuing an estate.

Money Advice Service has guidance on when and how to hire a professional. Law Donut has advice on keeping solicitors’ fees down.

Contact HMRC to get help with:

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