A valuation of an estate’s assets can influence the amount of inheritance tax that has to be paid before a Grant of Probate is issued. This aspect is frequently disregarded by executors.
The IHT Threshold
£325,000 is currently the nil-rate band for IHT. Estates worth over this amount will be liable for IHT, at 40% on the amount over the threshold. For this reason, slight errors in valuation could have significant effects on the IHT liability of an estate.
Which Assets Need Valuing
An undervaluation of assets in an estate can be queried by HMRC long after probate has been granted. If HMRC do discover an error then the unpaid tax will be charged with interest on top and there could even be a penalty charged on top of that the executors would have to pay personally. For more information on Probate Leicester visit https://beesandco.com/our-services/probate/leicester/
The Problem With Overvaluing
Just because you have over valued an asset does not mean that the problem has gone away, because the value that has been put on it would mean that the estate would pay more tax and therefore would be wrongly paid.
Getting a Reliable Valuation
Accurate valuations of assets in an estate are important to protect the estate and the executors personally.
